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Forward Rate. a. Assume that as of today, the annualized two-year interest rate is 0.14, while the one-year interest rate is 0.02. Assume that
Forward Rate. a. Assume that as of today, the annualized two-year interest rate is 0.14, while the one-year interest rate is 0.02. Assume that the liquidity premium on a two-year security is 0.003. Use this information to re-estimate the one-year forward rate. Enter the answer in decimal form using 4 decimals (e.g. 0.1234)
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Introduction To Derivatives And Risk Management
Authors: Don M. Chance, Robert Brooks
10th Edition
130510496X, 978-1305104969
