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Suppose that todays annual market interest rates are 2.5% for a 2-year deposit/loan, 3.5% for a 3-year deposit/loan, and 4.5% for a 4-year deposit/loan. What
Suppose that todays annual market interest rates are 2.5% for a 2-year deposit/loan, 3.5% for a 3-year deposit/loan, and 4.5% for a 4-year deposit/loan. What is the forward interest rate for a 2-year deposit in 2-years time. (Use six decimals for your computations)
A) 3.50000%
B) 2.00000%
C) 6.03921%
D) 7.06127%
E) 6.5390%
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