The term structure of zero rates is as follows: Maturity (years) Interest rate (%) 1 2.0 2 2.5 3 3.0 Above are annual rates with continuous compounding. (a) Consider a 3-year government bond with the face value of $1,000. The bond will pay $30 coupon every year, including year 3. What is the present value of the bond in year 0? (b) What is the implied forward rate r 0 (2,3) with continuous compounding? (c) Suppose that we want to borrow $100 in year 2 and repay in year 3. We want to fix now the interest rate for this borrowing. How can we achieve this using zero-coupon bonds? Show the table that lists the required bond positions and cash fows.