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Relation between spot and forward rates Suppose the spot rates for 1 and 2 years are s1=6.3% and s2=6.9% with annual compounding. Recall that in
Relation between spot and forward rates
Suppose the spot rates for 1 and 2 years are s1=6.3% and s2=6.9% with annual compounding. Recall that in this course interest rates are always quoted on an annual basis unless otherwise specified. What is the forward rate, f1,2 assuming annual compounding? Please submit your answer as a percentage rounded to one decimal place so, for example, if your answer is 8.789% then you should submit an answer of 8.8.
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