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1. Given a term structure of 6.4%, 7.0%, 7.5%, 8.2%, and 8.6% for 1 to...

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Finance

1. Given a term structure of 6.4%, 7.0%, 7.5%, 8.2%, and 8.6% for 1 to 5 years T-bonds, what is the forward rate of interest on a three-year security for the third year (i.e., the expected 3-year interest rate for the third year, E(3r3),?

2. Given the following term structure of 2.48%, 3.26%, 3.64%, 3.98% and 4.25% for the most on-the-run issues of Treasuries with maturity from 1 to 5 years (assuming those were issued at par), compute the zero-rate for a 3-year T-bond, assuming annual coupon payments?

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