Based on the following rates: 1-year spot rate 3.0% 1-year forward rate one year from now...
Based on the following rates:
1-year spot rate 3.0%
1-year forward rate one year from now 5.0% 2-year forward rate one
year from now 6.5% The 3-year spot rate is closest to:
Homework Answers
| Annualized Forward rate of 2 years 1 years from now =((1+3 Year rate)^3/(1+1 Year rate)^1)^1/2-1 |
| 0.065=((1+N2 rate)^3/(1+0.03)^1)^1/2-1 |
| N2 rate% = 5.32% |
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Based on the following rates:
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