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please show workings The forward rate f(t1,t2) of a bond, is the...

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Finance

please show workings image
The forward rate f(t1,t2) of a bond, is the implicit interest rate in a future period between time t1 and t2. For example, assuming continuous time returns, if the discount rate from period 0 to t1 is: exp(rt1), and from period 0 to t2 (greater than t1 ) is: expl (rt2), then the forward rate ffrom t1 to t2 maintains the following no arbitrage relationship: exp(rt1)exp(f(t2t1)=exp(rt2)). Suppose we observe the prices of a 14-year zero-coupon bond (with a fack value of \$93.31), where P(t1,t2) repans the price of the bond between t1 and t2, and a year 7 -to-14 forward rate as follows: P(0.14)=$86.5496905000 and f(7,14)= 0.6074704253%. Calculate the price of a 7-year zero-coupon, with face value $99.27 : $82.9604 - $96.0778 (25 \%) $96.2349 $82.1804

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