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The 1-year forward rates, deferred for t years are provided in the table below t 0 1 2 3 4 1-year forward 5% 3% 2%
The 1-year forward rates, deferred for t years are provided in the table below
t | 0 | 1 | 2 | 3 | 4 |
1-year forward | 5% | 3% | 2% | 4% | 6% |
Calculate the spot rate for a bond that matures 3 years from now.
(A) 3.0%
(B) 3.3%
(C) 4.0%
(D) 6.0%
(E) 8.1%
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