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12. Calculate the forward rate in year 3 based on the below information: the Forward rate in year 1 is 5.4%; the Forward rate in

12.

Calculate the forward rate in year 3 based on the below information: the Forward rate in year 1 is 5.4%; the Forward rate in year 2 is 5.8%; and the Yield on 3-year zero coupon bond is 6.7%. Select one:

a. 18.98%

b. 8.9%

c. Insufficient information to determine

d. 6.7%

e. 11.51%

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