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Suppose, besides the information you have above, you know that the spot 1-yr rate is 3.3%. And you also know that the next two forward

  1. Suppose, besides the information you have above, you know that the spot 1-yr rate is 3.3%. And you also know that the next two forward rates are each 5%. Use the formula from the lectures this week to find the forward rate for three years from now (f4 in the notation weve been using). Here, too, do both the approximate and exact ways.

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