Q7: Given the zero coupon bond prices in the following table: Time(yrs) 1 2 3 4 5 Price 0.97220 0.94287 0.91222 0.88256 0.85413 4 marks each.

a) Compute the 1 year forward rates F[n,n+1] for n = 0 through 4.

b) Compute the expected annual floating interest payments on a 5 year swap with a notional principal of $7000000 based on this yield curve.

c) Compute the 5 year fixed (annual) swap rate.