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Suppose that the yield curve for the next 3 years is given by ( there are no liquidity premia ) : Maturity Spot Rate 1
Suppose that the yield curve for the next years is given by there are no liquidity premia:
Maturity Spot Rate
Calculate the forward rate for one year, one year from now f
Calculate the forward rate for one year, two years from now f
Calculate the forward rate for two years, one year from now f
According to the Expectations Theory, interest rates are expected to increase, decrease or
remain stable in the future?
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