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A yield curve is defined as it=0.020.001t+0.001t2 where it is the annual effective rate of return for a zero-coupon bond that matures in t years.

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A yield curve is defined as it=0.020.001t+0.001t2 where it is the annual effective rate of return for a zero-coupon bond that matures in t years. Calculate the 1-year forward rate, deferred for 4 years. (A) 3.14% (B) 4.00% (C) 7.26% (D) 9.10% (E) 12.52%

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