The (zero coupon) U.S. Treasury strip maturing in one year and having a face value of $1000 is selling at an annualized yield to maturity of 2.40 percent, which is equivalent to a price of 97.65625 percent of par (face) value. The (zero coupon) U.S. Treasury strip (with a face value of $1000) maturing in two years is selling at an annualized yield to maturity of 2.8 percent, which is equivalent to a price of 95.083 percent of par value. A coupon-paying U.S. Treasury bond having a coupon rate of 2.5 percent, a face value of $1000 and three years to maturity is selling at 97.5247 percent of par (face) value. Assuming that interest payments for coupon-paying bonds are paid annually (once per year) and that bond yields are quoted as annualized interest rates (don't worry about semiannual compounding),

a. determine the price and annualized yield for a U.S. Treasury strip having a face value of $1000 and 3 years to maturity (5 points),

b. determine the forward rate of interest for the 2-year period that begins at the end of 1 year (5 points),

c. determine the price for a U.S. Treasury bond (making annual coupon payments) having a face value of $1000, a 5.5 percent coupon rate and 3 years to maturity.