On January 2008 the following spot rate applied: y1=4%, yz=4.5%, Y3=5%. a Calculate the price of a bond, issued on 1 January 2008. which is redeemed at par on 31 December 2010 and pays coupons of 8%! annually in arrears. [3] b) Calculate the Gross Redemption Yield on this bond. [4] C) If an investor agreed on 1 January 2008 to invest 100 in 1 year's time for a 3-year term then the accumulated value of the investment on 31 December 2011 is 120. Calculate the forward rate of interest |13 and /2z, assuming no arbitrage. [4] [Total 11)