The fixed rate for a 4 year interest rate swap with a level notional amount is 2 The variable interest rate is determined by the one year forward rate The following table shows zero coupon bond prices (per dollar of face value) year 1 2 3 4 zero coupon bond price 0 98 0 97 0 95 A) Find the price per unit of maturity value for a 4 year zero coupon bond B) Find the one year forward rate deferred 2 years C) Find the price for a 4 year 5 annual coupon bond redeemed at par value $100

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Question: The fixed rate for a 4-year interest rate swap with a level notional amount is 2%. The variable interest rate is determined by the one

The fixed rate for a 4-year interest rate swap with a level notional amount is 2%. The variable interest rate is determined by the one year forward rate. The following table shows zero- coupon bond prices (per dollar of face value):

year	1	2	3	4
zero - coupon bond price	0.98	0.97	0.95	?

A) Find the price per unit of maturity value for a 4-year zero-coupon bond. B) Find the one year forward rate deferred 2 years. C) Find the price for a 4-year 5% annual coupon bond redeemed at par value $100.

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