The two-year spot rate is 4% and the four-year spot rate is 5%. You can buy a two-year zero coupon bond or a four-year zero coupon bond. Which bond will have the highest return over the first year?

	A.	The two-year zero.
	B.	The four-year zero.
	C.	Both zeros will have the same return over the first year.

You have one-year, three-year, and four-year spot rates. Which of the following forward rates cannot be computed from this information.

	A.	Three-year loan beginning in one year
	B.	Two-year loan beginning in two years
	C.	Two-year loan beginning in one year
	D.	One-year loan beginning in three years