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Assume annual rates. 2-year rates are 4% and 3-year rates are 5%. What is the one-year forward rate 2 years from now? Back to problem
- Assume annual rates. 2-year rates are 4% and 3-year rates are 5%. What is the one-year forward rate 2 years from now?
Back to problem 1. Assume the 2-year rate has a 10 bps term premium and the 3-year rate has a 15 bps term premium. Assuming annual rates, calculate the one-year EXPECTED rate 2 years from now.
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