You enter into a forward contract to buy a 10 year, zero coupon bond that will be issued in one year. the face value of the bond is 1000. and in one year and 11 yearspot interest rates are 4% per annum and 9 % per annum, respectively. both of these interest ratesare expressedas effective annual yields.
What is the forward price of the contract?
Suppose both the spot rates unexpectedlyshift downward by 1 percent
What is the price of a forward contract otherwise indentical to yours?