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1) Assume today's 6-month spot rate is 20% and in six months the new 6- month spot rate can be either (20+x)% or (20-x)% with
1) Assume today's 6-month spot rate is 20% and in six months the new 6- month spot rate can be either (20+x)% or (20-x)% with equal probability so that the expected 6- month spot rate of 6 months from...
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