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

Maturity (vears) T

1-8%

2-10%

3-12%

Question 1.What are the implied one year forward rates??choose one explain, write down the calculation

1. A) 10%, 15%
2. B) 11%, 14%
3. C) 11%, 12%
4. D) 12%, 16%

Question 2

18) What will be the yield to maturity on two-year zeros in the next year?

A) 15%

B). 14%

C) 12%

D)11%

Question 3

19) If you purchase a two-year zero-coupon bond now, what is the expected total rate of return over the next year? Ignore taxes. choose the closest one>

A)5%

B) 6%

C)7%

D)8%