Following are the yields (YTMs) of three government bonds:

YTM of a 1-year Bond = 3.5%

YTM of a 2-year Bond = 4.0%

YTM of a 3-year Bond = 5.0%

i. Calculate the one-year rate, one year from now, that is 1r2 implied by this yield curve. (Show answer correct to 4 decimal places).

ii. Calculate the one-year rate, two year from now, that is 2r3 implied by this yield curve. (Show answer correct to 4 decimal places).