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Please help need for review for test Suppose that the prices of zero-coupon bonds with various maturities are given in the following table. The face

Please help need for review for test

Suppose that the prices of zero-coupon bonds with various maturities are given in the following table. The face value of each bond is $1,000.

Maturity (Years) Price
1 $ 968.16
2 878.39
3 812.92
4 749.00
5 675.46

a. Calculate the forward rate of interest for each year. (Round your answers to 2 decimal places.)

Maturity (years) Forward Rate

2 ---------%

3 --------%

4 -----------%

5 ----------------%

b. How could you construct a 1-year forward loan beginning in year 3? (Round your Rate of synthetic loan answer to 2 decimal places.)

Face value -------------

Rate of synthetic loan --------%

c. How could you construct a 1-year forward loan beginning in year 4? (Round your Rate of synthetic loan answer to 2 decimal places.)

Face value -------------

Rate of synthetic loan --------%

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