The 1-year forward rate of interest at time t = 1 year is 5% per annum effective. The gross redemption yield of a 2-year fixed-interest stock issued at time t = 0, which pays coupons of 3% per annum annually in arrears and is redeemed at 102, is 5.5% per annum effective. The issue price at time t = 0 of a 3-year fixed-interest stock bearing coupons of 10% per annum payable annually in arrears and redeemed at par is 108.9 per 100 nominal.

a) Calculate the 1-year spot rate per annum effective at time .t = 0

b) Calculate the 1-year forward rate per annum effective at time t = 2 years.

c) Calculate the 2-year par yield at time t = 0.