Consider the following spot interest rates for maturities of one, two, three, and four years. r1 = 3.7% r4 = 5.7% r₂ = 4.2% r3 = 4.9% What are the following forward rates, where fi, k refers to a forward rate for the period beginning in one year and extending for kyears? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

Consider the following spot interest rates for maturities of one, two, three, and four years. r1 = 3.7% r4 = 5.7% r₂ = 4.2% r3 = 4.9% What are the following forward rates, where fi, k refers to a forward rate for the period beginning in one year and extending for kyears? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Current interest rates are i$ = 4%;i€ = 6%. Expected interest rates next year are: i$ = 7%;i € = 3%. The expected spot rate in two years is S2($/€) = 1. Use the asset market approach to compute the current spot rate S0($/€). Please type in the number without the currency signs. For example, if your answer is $1.25/€, then type in 1.25 as your final answer. Please keep at least three decimal places (up to 5 decimal places)
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Suppose that the current 1-year rate (1-year spot rate) and expected 1-year T-bill rates over the following three years (i.e., years 2, 3, and 4, respectively) are as follows:1R1 = 2.62%, E(2r1) = 3.90%, E(3r1) = 4.40%, E(4r1) = 5.90%Using the unbiased expectations theory, calculate the current (long-term) rates for one-, two-, three-, and four-year-maturity Treasury securities. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
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If you are expecting to get OMR 35743 at the end of 3 years. Calculate its present value if the interest rate is 9% and is computed quarterly. O a. 27367.46 O b. 27600.77 O c. All the given choices are not correct O d. 33435.92 O e. 12710.88
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