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1.The two-year zero rate is 5% and the three-year zero rate is 5.5%. What is the forward rate for the third year? All rates are
1.The two-year zero rate is 5% and the three-year zero rate is 5.5%. What is the forward rate for the third year? All rates are continuously compounded. a. 5.75% b. 6.00% c. 6.25% d. 6.50%
2.An interest rate is 4% per annum with continuous compounding. What is the equivalent rate with semiannual compounding? a. 4.04% b. 4.00% c. 4.12% d. 3.95%
3.An interest rate is 10% per annum with semiannual compounding. What is the equivalent rate with quarterly compounding? a. 9.87% b. 11.66% c. 11.77% d. 11.92%
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