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Consider the following spot interest rates for maturities of one, two, three, and four years. r 1 = 3.4% r 2 = 3.9% r 3

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, wheref_k,₁refers to a forward rate beginning inkyears and extending for 1 year? PLEASE SHOW YOUR CALCULATIONS AND EXPLAIN.

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