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Problem 15-19 The prices of zero-coupon bonds with various maturities are given in the following table Suppose that you want to construct a 2-year maturity

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Problem 15-19 The prices of zero-coupon bonds with various maturities are given in the following table Suppose that you want to construct a 2-year maturity forward loan commencing in 3 years. The face value of each bond is $1,000 Maturity (Years) price s 983.16 893.39 830.92 769.40 664.94 5 a. Suppose that you buy today one 3-year maturity zero-coupon bond. How many 5-year maturity zeros would you have to sell to make your initial cash flow equal to zero? (Round your answer to 4 decimal places.) 5-year maturity zeros 1.2496 b. What are the cash flows on this strategy in each year? (Negative value should be indicated by a minus sign. Leave cell blank if there is no effect. Round your answers to 2 decimal places.) Time Cash Flow 1,000.00 5

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