Based on the information provided in question 2, the 1-yr and 3-yr zero bond prices are:

		$0.986 and $0.942, respectively
		$0.916 and $0.999, respectively
		$0.816 and $0.982, respectively
		$0.926 and $0.957, respectively

Based on the information reported in Table from question 2, what is the forward rate between year 1.5 and year 2?

	a.	1%
	b.	3%
	c.	2%
	d.	4%

QUESTION 5

Based on the information reported in Table from question 2, what is the forward rate between year 2.5 and year 3?

	a.	2%
	b.	3%
	c.	4%
	d.	1%

The table below reports the spot rates per annun (semi-annual compounded) and the corresponding zero coupon bond price with $1 face value at different maturities. Compute the 2-yr spot rate a. 1.7% b. 1.1% c. 3.2% d. 2.2%