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Consider the following spot interest rates for maturities of one, two, three, and four years. r1= 3.4% r2= 3.9% r3= 5.2% r4= 6.1% What are
Consider the following spot interest rates for maturities of one, two, three, and four years.
r1= 3.4% r2= 3.9% r3= 5.2% r4= 6.1%
What are the following forward rates, where F(K,1)refers to a forward rate beginning in k years and extending for 1 year?
Rates to be calculated: F(2,1) and F(3,1)
PLEASE SHOW YOUR CALCULATIONS AND EXPLAIN.
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