Suppose that you have the following information about interest rates:
The price of a zero coupon risk-free bond maturing in one year is $994
The price of a zero coupon risk-free bond maturing in two years is $983
The price of a zero coupon risk-free bond maturing in three years is $970
First, calculate the yield to maturity for the three bonds. Second, calculate each of the one year forward rates. Third, draw a diagram that shows the term structure of interest rates for these bonds showing both YTM and forward interest rates.