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Consider the following spot interest rates for maturities of one, two, three, and four years. r1 = 6.10% r2 = 6.00% r3 = 5.80% r4 = 5.50% What are the following forward rates? Hint: f1, k refers to a forward rate for the period beginning in one year and extending for k years. fk,1 refers to a forward rate beginning in k years and extending for 1 year. f1,1 : f1,2 : f1,3 : f2,1:  f3,1 :

Consider the following spot interest rates for maturities of one, two, three, and four years. r1 = 6.10% r2 = 6.00% r3 = 5.80% r4 = 5.50% What are the following forward rates? Hint: f1, k refers to a forward rate for the period beginning in one year and extending for k years. fk,1 refers to a forward rate beginning in k years and extending for 1 year. f1,1 : f1,2 : f1,3 : f2,1:  f3,1 :

Essentials Of Investments
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
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Consider the following spot interest rates for maturities of one, two, three, and four years.

r1 = 6.10%

r2 = 6.00%

r3 = 5.80%

r4 = 5.50%

What are the following forward rates?

Hint: f1, k refers to a forward rate for the period beginning in one year and extending for k years. fk,1 refers to a forward rate beginning in k years and extending for 1 year.

f1,1 :

f1,2 :

f1,3 :

f2,1: 

f3,1 :

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