Using annual compounding, the fundamental relationship between spot rates and forward rates is given by: $(1 + S_6)^6 = (1 + S_4)^4 \times (1 + F_{4,6})^2$

Substitute the given spot rates ($S_4 = 3\%$, $S_6 = 4\%$): $(1.04)^6 = (1.03)^4 \times (1 + F_{4,6})^2$ $1.265319 = 1.125508 \times (1 + F_{4,6})^2$$(1 + F_{4,6})^2 = \frac{1.265319}{1.125508} = 1.12422$`$1` + F_{4,6} = \sqrt{1.12422} = 1.060292$

$F_{4,6} = 6.03\%$