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Consider the following data obtained on Treasury STRIPS of various maturities. N Yield 1 1.25% 2 1.85% 3 2.35% Compute the implied forward rate on
Consider the following data obtained on Treasury STRIPS of various maturities.
N Yield
1 1.25%
2 1.85%
3 2.35%
Compute the implied forward rate on a one-year security at the beginning of year 2.
-
2.45%
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B. 1.85%
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C. 1.65%
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D. 1.55%
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