the current yield curve for default- free zero coupon vinds with fsce value of $1000 is as follows: (i) one-year zero, ytm 10%; and (ii) two year zero, ytm 12%

a) what is the implied one year forward rate?

b) if the liquidity premium hypothesis is correct and there exists a liquidity premium of 1% what will the one year spot rate be next year? assume market expectations are correct

c) if you purchase a 2 yesr zero coupon bond now, what is ite current price and what is the expected total rate of return over the next year?