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Compute the implied forward rate when a 6-month CD is providing 4% yield and 12-month CD is providing 5% yield (show calculations). If the 6-month

Compute the implied forward rate when a 6-month CD is providing 4% yield and 12-month CD is providing 5% yield (show calculations). If the 6-month yield after six months is 5%, would you make a gain or loss by investing in the 12-month CD and selling after six months? Estimate Gain or Loss from this strategy (show calculations). Logically explain the reason for gain or loss.

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