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Question 3 Assume the following spot rates. Year 1 2 3 Spot rate 3 4.5 5.5 a. Calculate the one-year forward rate over the second

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Question 3 Assume the following spot rates. Year 1 2 3 Spot rate 3 4.5 5.5 a. Calculate the one-year forward rate over the second year. b. Calculate the one-year forward rate over the third year. [10] [10]

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