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The current one year spot rate is 2% and the current three year spot rate 10 puntos is 6%.Given this information, what is the lowest
The current one year spot rate is 2% and the current three year spot rate 10 puntos is 6%.Given this information, what is the lowest two-year spot rate that is consistent with no-arbitrage in the term structure? (Hint: you need to make sure that the forward rates are not negative.) 0.25% O 0.33% 0.56% 0.73% O 1.00%
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