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On March 11, the existing or current (spot) 1-, 2-, 3-, and 4-year zero-coupon Treasury security rates were as follows: 1R1 0.60%, 1R2 = 1.20%, 183= 1.60%, 1R4 = 1.75% Using the unbiased expectations theory, calculate the 1-year forward rates on zero-coupon Treasury bonds for years 2, 3, and 4 as of March 11. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Years Forward rates 2 3 4 % % %

On March 11, the existing or current (spot) 1-, 2-, 3-, and 4-year zero-coupon Treasury security rates were as follows: 1R1 0.60%, 1R2 = 1.20%, 183= 1.60%, 1R4 = 1.75% Using the unbiased expectations theory, calculate the 1-year forward rates on zero-coupon Treasury bonds for years 2, 3, and 4 as of March 11. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Years Forward rates 2 3 4 % % %

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
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On March 11, the existing or current (spot) 1-, 2-, 3-, and 4-year zero-coupon Treasury security rates were as follows: 1R1 0.60%, 1R2 = 1.20%, 1R3 = 1.60%, 1R4 1.75% Using the unbiased expectations theory, calculate the 1-year forward rates on zero-coupon Treasury bonds for years 2, 3, and 4 as of March 11. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Years 2 3 4 Forward rates %
Transcribed Image Text:On March 11, the existing or current (spot) 1-, 2-, 3-, and 4-year zero-coupon Treasury security rates were as follows: 1R1 0.60%, 1R2 = 1.20%, 1R3 = 1.60%, 1R4 1.75% Using the unbiased expectations theory, calculate the 1-year forward rates on zero-coupon Treasury bonds for years 2, 3, and 4 as of March 11. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Years 2 3 4 Forward rates %
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