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Assume semi-annual compounding (for this question). The 1-year spot interest rate is 2%; the 1.5-year spot rate is 2.6%; the 2-yr is 3%. What is
Assume semi-annual compounding (for this question).
The 1-year spot interest rate is 2%; the 1.5-year spot rate is 2.6%; the 2-yr is 3%.
What is the implied forward 6-month rate 18 months from today?
What is the implied forward 1-year rate 1 year from today?
II The 1-week money market rate is 5.9%; the four-week rate is 6%. What is the forward 1-week rate three weeks from today?
What if the 1-week rate is also 6%?
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