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Use the following information to answer questions 1 6 - 1 7 Current 1 - year spot rate = 5 . 5 % the 1

Use the following information to answer questions 16-17
Current 1-year spot rate =5.5%
the 1-year forward rate one year from now: f1=7.63%,
the 1-year forward rate two years from now: f2=12.18%
the 1-year forward rate three years from now: f3=15.5%
16. The value of a 4-year, 10% annual-pay, $1,000 par value bond would be closest to:
A. $844.55
B. $995.89
C. $1,009.16
D. $1,085.62
17. Using the annual compounding, the value of a 3-year, zero-coupon, $1,000 par value bond would be :
A. $708
B. $785
C. $852
D. $948

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