You are given the following benchmark spot rates:

Maturity Spot rate

1 2.90%

2 3.20%

3 3.60%

4 4.20%

a) Compute the forward rate between years 1 and 2.

b) Compute the forward rate between year 1 and 3.

c) What is the zero price today of a five-year-zero-coupon bond if the forward price for a one-year-zero-coupon bond beginning in four years is known to be 0.9461?

d) Calculate the price of a 4% annual coupon corporate bond with two years remaining to maturity has a Z-spread of 200 bps. Assume interest paid annually.