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Assume that as of today the annualized interest rate on a three year security is 8%, while the annualized interest rate on a two year
Assume that as of today the annualized interest rate on a three year security is 8%, while the annualized interest rate on a two year security is 6%. Assuming that interest is compounded, use this information to find the one year forward rate two years from now.
A)2.11%
B)18.8%
C)11.75%
D)12.00%
E)12.11%
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