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Suppose the spot rates of interest for investment horizons of 1, 2, 3 and 4 years are, respectively, 3%, 3.5%, 3.5%, and 4%. Calculate the
Suppose the spot rates of interest for investment horizons of 1, 2, 3 and 4 years are, respectively, 3%, 3.5%, 3.5%, and 4%. Calculate the forward rates of interest for t = 1, 2, 3 and 4 Suppose the forward rates of interest for investments in year 1, 2, 3 and 4 are, respectively, 5%, 5.5%, 5.5% and 6%. Calculate the spot rates of interest for t = 1, 2, 3 and 4
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