21. Forward Interest Rates (LO3, CFA8) Consider the following spot interest rates for maturities of one, two, three, and four years.

r 1  = 4.3% r 2  = 4.9% r 3  = 5.6% r 4  = 6.4%

What are the following forward rates, where f1,k refers to a forward rate for the period beginning in one year and extending for k years?

f 1,1  = ; f 1,2  = ; f 1,3  =

Hint: Use the equation (1 + r1)(1 + f1, k)k = (1 + rk+1)k+1 to solve for f1, k.