Forward contract

swilliams505 | 04:22 Tue 11th Oct 2005 | Business & Finance

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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 the 1 year and 11 year spot interest rates are 3 percent per annum and 8 percent per annum both of the interest rates are exprested as effective annual yeilds (EAYs)

what is forward price of contract

what if both rates unexpectedly shift downward by 2 percent what is the fprice orward contract otherwise identical to yours

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