Use the following continuously compounded zero rates and forward rates for Problems 8-9: 1 year zero rate is 3.25% or 0S1 2 year zero rate is 3.75 % or 0S2 3 year zero rate is 4.25% or 0S3 5 year zero rate is 6.00% or 0S5 5th year forward rate 9.00% or 4F5

8.) What is the forward rate for the 3rd year (2F3)?

A.) 5.26%

B.) 5.25%

C.) 5.01%

D.) 5.00%

E.) 4.00%

9.) If you invested $1000 today, how much would you have at the end of four years? HINT: Find the four year zero rate (0S4).

A.) $1234

B.) $1227

C.) $1206

D.) $1201

E.) $1193