You invest in a three year bond with a face value of $100, a yield of 8% pa and a fixed coupon rate of 6% pa, paid semi-annually. So, there are two coupons per year, paid in arrears every six months.Which of the following statements is NOT correct?

a. The current 3 year bond price is $94.7579

b. The effective annual rate of the three year bond is 8.1600%

c. If this company also has a 2 year bond on issue with a semi-annual yield of 10%, the forward rate over the third year (from t=2 to t=3), expressed as an APR compounding semi-annually,is 4.057%

d. The bond quotes indicate that the yield curve is inverse (downward sloping).

e. Because rational investors value stability, you would invest in the three year bond in preference to a strategy where you would invest in a two year bond followed by a one year bond.