Question 1. Zero coupon yields for maturities of 1-3 are y1 = 5%, y2 = 6.75%, y3 = 6%. Find the one-year forward rates f1 (the one-year rate from year 1 to year 2) and f2 (the one-year rate from year 2 to year 3).
Zero coupon yields		Forward rates
y1	5.00%	f1
y2	6.75%	f2
y3	6.00%
Question 2. Recall that the par yield is the coupon rate that ensures that a bond sells at par. Using the zero coupon yields given in Question 14, find the par yield for a maturity of 3 years. (Hint: use Goal Seek)
		Zero coupon yields			Years
Face value of 3-year bond:	$100.00	y1	5.00%		1	2	3
Par yield		y2	6.75%	Cash flows				Sum
Gap	$100.00	y3	6.00%	Discounted cash flows