Question
Annual effective yields for zero-coupon bonds are 7.5% for 1-year bonds, 8.5% for 2-year bonds, and 9.25% for 3 year bonds. Find the 1-year forward
Annual effective yields for zero-coupon bonds are 7.5% for 1-year bonds, 8.5% for 2-year bonds, and 9.25% for 3 year bonds. Find the 1-year forward rate, starting in 1 year.
(A) 8.0%
(B) 9.5%
(C) 10.0%
(D) 10.8%
(E) 11.0%
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Corporate Finance Reader
Authors: Robert W. Kolb
2nd Edition
1878975536, 978-1878975539
