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Suppose that in the fixed-income securities market, the one-year and two-year spot interest rates are 10.000% and 8.500%, respectively. [That is, R 0,1 = 10.000%

Suppose that in the fixed-income securities market, the one-year and two-year spot interest rates are 10.000% and 8.500%, respectively. [That is, R_0,1 = 10.000% and R_0,2 = 8.500%.]

Then, as per the no-arbitrage principle, what is the one-year forward rate one year from now? That is what is the (theoretical) value of F^Theo_1,1 ? (4 decimal places required)

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