You observe that one-, two-, and three-year maturity, default-free, zero-coupon bonds have YTM of 7%, 7.8%, and 7.5%, respectively. Based on the expectations theory, what is the implied one-year forward rate, one year from today?

A. 8.10%

B. 8.61%

C. 6.91%

D. 7.39%

You observe the current yield curve as follows: r0.5=4%, r1=4.2%, r1.5=4.3%, and r2=4.1%. What is the price of a T-note which has a coupon rate of 4%, 2 years to maturity, and $1,000 par?

A. $1,064.60

B. $998.03

C. $992.52

D. $988.87