Following is the current yield to maturity on Treasury bills of various maturities: Time to Maturity Yield
Question:
Time to Maturity Yield
Months %
1 .......... 5.0
3 .......... 5.2
6 .......... 5.4
9 .......... 5.8
Assuming monthly compounding, what should the forward interest rate of a three-month T-bill be if it is to be delivered at the end of three months? What if it is to be delivered at the end of six months?
Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...
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Related Book For 
Introduction to Corporate Finance What Companies Do
ISBN: 978-1111222284
3rd edition
Authors: John Graham, Scott Smart
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