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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 = 0.75%,  1R2 = 1.35%,  1R3 = 1.75%, 1R4 = 1.90%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 = 0.75%,  1R2 = 1.35%,  1R3 = 1.75%, 1R4 = 1.90%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
Section: Chapter Questions
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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 = 0.75%,  1R2 = 1.35%,  1R3 = 1.75%, 1R4 = 1.90%
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   %
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