Stone Chippings Importer June 2009

Hi John, can you kindly guide me that why have we discounted the forward rates in this question with their relative discount rates? I mean what’s the whole point of this question’s part (a) , we are already given the forward rates, so why the need for fixed forward rate? And is it how banks quote(set) us their forward rates in practice(or in theory atleast), I mean by discounting the rates of future months at a risk free rate and then dividing by sum of discount factors?

Thanks