1. Given the data in the table and the information below, please answer the following question. Show all working and formulas used.

Maturity (T)	r(1)	r(2)	r(3)	r(4)	r(5)	r(6)
Spot Rate (%)	0.15	0.22	0.31	0.28	0.12	0.07

Misty would like to invest 10,000. She is faced with the choice between 2 investments:

Option 1: invest for 5 years;

Option 2: invest for 1 year and reinvest for another 4 years at a forward rate of 0.07%

Which one is the optimal option to Misty, or she should be indifferent between the choices?