The following table summarises yields for T-bonds and C-bonds respectively (do the calculations for four decimal places).

Bond Rates	1year rate	2year rate
T-bond	2.15% pa	2.75% pa
C-bond	3.25% pa	4.50% pa

1.Estimate cumulative probability of default for two-year corporate bond if the probability of full payment in year 1 is same as in year 2.

2.Calculate one-year forward rates for bonds.

3.Estimate the cumulative probability of corporate bond defaulting over the two-year period (hint: use the forward rate in your calculation).