The yield curve for default-free zero-coupon bonds is currently as follows:

Maturity (years)	YTM	Forward rate
1	10%
2	11	12.01%
3	12	14.03%

Yield to maturity on two-year zeros: YTM = 13.01%

Required:

a. If you purchase a two-year zero-coupon bond now, what is the expected total rate of return over the next year? (Hint: Compute the current and expected future prices.) Ignore taxes. (Do not round intermediate calculations. Round your answer to the nearest whole percent.)

b. If you purchase a three-year zero-coupon bond now, what is the expected total rate of return over the next year? (Hint: Compute the current and expected future prices.) Ignore taxes. (Do not round intermediate calculations. Round your answer to the nearest whole percent.)