Suppose that the yield curve for the next $3$ years is given by $($there are no liquidity premia$)$:

Maturity Spot Rate

$110\%$

$210\%$

$38\%$

$1.$ Calculate the forward rate for one year, one year from now f$1,1.$

$2.$ Calculate the forward rate for one year, two years from now f$1,2.$

$3.$ Calculate the forward rate for two years, one year from now f$2,1.$

$4.$ According to the Expectations Theory, interest rates are expected to increase, decrease or

remain stable for next year $($i$.$e$.,$ the period from the end of the first to the end of the second

year$)?$