(b) If the yield to maturity of a 5-year zero-coupon bond is up by 75 basis points from 2.25% to 3.00% immediately after the purchase of this bond, what is the percent change in the value of this bond? (1.5 marks) [2:10 PM] Question 4 Term Structure of Interest Rates (4 marks) The yield to maturity on one-year zero-coupon bonds is 6%. The yield to maturity on two-year zero-coupon bonds is 8%.

(a) Calculate the implied one-year forward interest rate for the second year. (2 marks)

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