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20. Assuming annual compounding, the prices of a one-year 4% coupon bond and a two-year 5% coupon bond are $101 and $99, respectively. The forward

20. Assuming annual compounding, the prices of a one-year 4% coupon bond and a two-year 5% coupon bond are $101 and $99, respectively. The forward rate between one and two years is:

  • a) 4.5%
  • b) 5.0%
  • c) 6.8%
  • d) 8.3%

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