4. Today (at time t = 0) suppose that there is a 1-year zero-coupon bond with a price of $98.02 and a 2-year zero-coupon bond with a price of $94.18 traded on the market. Both bonds have a principal of $100. Assume that you are able to buy and short sell both bonds today at their quoted prices. (a) What is today's 1-year forward interest rate fo(1, 2) (for year 2, continuously compounded and in % per annum) implied by the given zero-coupon bond prices?

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