The REIT has been offered the following zero interest rates with continuous compounding:

Explain the importance of zero rates and calculate forward interest rates for the months: 6, 9, 12,15,18, 21,24. Also, explain why forward interest rates may be useful to a REIT for risk management purposes.

Maturity (months) 3 6 9 12 15 18 21 24 Zero Rate (% per annum) 12.0 12.4 12.5 12.6 12.7 12.8 14.0 14.3 Maturity (months) 3 6 9 12 15 18 21 24 Zero Rate (% per annum) 12.0 12.4 12.5 12.6 12.7 12.8 14.0 14.3