Finding Forward Rates Suppose the following yield curve: 1-period rate = 4.75%, 2-period rate=4.85%, 3-period rate= 4.90%, 4 period rate=5.01%. What is the 2 year forward rate in 2 years? What is 1 year rate in 2 years?

Finding Forward Rates Suppose the following yield curve: 1-period rate = 4.75%, 2-period rate=4.85%, 3-period rate= 4.90%, 4 period rate=5.01%. What is the 2 year forward rate in 2 years? What is 1 year rate in 2 years?

EBK CFIN

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ISBN:9781337671743

Author:BESLEY

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Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 15PROB

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Finding Forward Rates
Suppose the following yield curve: 1-period rate = 4.75%, 2-period rate=4.85%, 3-period rate=
4.90%, 4 period rate=5.01%. What is the 2 year forward rate in 2 years? What is 1 year rate in 2
years?

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