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The bank has quoted the following forward rates. (Annual) 1 year spot rate today 0. 80% I year forward rate in 1 years' time 1.

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The bank has quoted the following forward rates. (Annual)

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1 year spot rate today 0. 80% I year forward rate in 1 years' time 1. 12% I year forward rate in 2 years' time 3. 94% I year forward rate in 3 years' time* 3. 28% I year forward rate in 4 years' time 3. 14 % The 3 - year implied spot rate is closest to : ( 2 ) 1. 953 % (b ) 1. 944 % ( C ) 3. 940% ( d ) 3.530%

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