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	$	960.66
2		870.89
3		803.92
4		738.80
5		680.72

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

Maturity (yrs) 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 answers to 2 decimal places.)

Face Value---?

Rate of Synthetic Loan---?