Question 8 The table below shows the price of zero-coupon bonds with redemption value 1,000: Term 1 2 3 Price 952 898 837 a) For a two-year investment, you can either purchase 2-year bonds or purchase 1-year bonds and reinvest from time 1 to time 2. b) For a three-year investment, you can either purchase 3-year bonds or purchase 2-year bonds and reinvest from time 2 to time 3. Calculate the minimum reinvestment rate for a) and b) so that your 2 or 3-year returns is at least as high as buying the longer-term bonds. (In other words, calculate the forward rates.) Minimum reinvestment rates: a) b)