16. Forward Interest Rates (LO3, CFA3) According to the pure expectations theory of interest rates, how much
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16. Forward Interest Rates (LO3, CFA3) According to the pure expectations theory of interest rates, how much do you expect to pay for a one-year STRIPS on February 15, 2020? What is the corresponding implied forward rate? How does your answer compare to the current yield on a one-year STRIPS? What does this tell you about the relationship between implied forward rates, the shape of the zero coupon yield curve, and market expectations about future spot interest rates?
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Related Book For 
Fundamentals Of Investments Valuation And Management
ISBN: 9781260013979
9th Edition
Authors: Bradford Jordan, Thomas Miller, Steve Dolvin
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