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Foward Rate Interest? According to the Unbiased Expectation Theory, if the one year interest rate is 1.80%, 1R 1=1.80%, and the expected one year rate
Foward Rate Interest?
According to the Unbiased Expectation Theory, if the one year interest rate is 1.80%, 1R 1=1.80%, and the expected one year rate is 2.5%, 3.74%, and 4.1% for the 2nd, 3rd, and 4th yearE( 2r 1)=2.5%, E( 3r )=3.74% El 47 )=4.1%, respectively. How much is the forward interest rate? 2.9711 2.993446 3.030846 3.041296Step by Step Solution
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