A fixed income analyst is studying the term structure of interest rates for a leading investment fund. The fund's portfolio includes zero-coupon bonds with maturities of 1 year, 2 years, and 3 years. The current prices of these bonds are as follows:
The analyst wants to calculate the implied forward rate from year 1 to year 2 (F1,2). How should the analyst approach this calculation to derive the correct forward rate?