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Mathematics, 22.12.2020 01:10 ayshajabeenmeox5jrh

A three-year $1,000, 4%, par-value bond with annual coupons sells for $990, a two-year $1,000, 3% bond with annual coupons sells for $988, and a one-year, zero-coupon, $1,000 bond sells for $974. (a) Determine the spot rates r1, r2, r3.
(b) Determine the implied forward rate f[0,1], f[1,2] and f[1,3].

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