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Suppose the forward rate is 10.2% in year 1 and 10.8% in year 2, and the yield on a 3-year zero-coupon bond is 11.8%. What
Suppose the forward rate is 10.2% in year 1 and 10.8% in year 2, and the yield on a 3-year zero-coupon bond is 11.8%. What must be the forward rate in year 3? a. 14.45% b. 2.37% c. 13.83% d. 12.81%
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