Question
The following table lists the annual spot rates for the next 4 years: Time (years) Rate (%) 1 2.33 2 3.13 3 4.85 4 5.88
The following table lists the annual spot rates for the next 4 years:
| Time (years) | Rate (%) |
| 1 | 2.33 |
| 2 | 3.13 |
| 3 | 4.85 |
| 4 | 5.88 |
Under these conditions, what would be the 2 year forward rate 2 years from now? In earlier notation, you are looking for 2y2y forward rate, and in the notation of this chapter, you are looking for the f(2,2) rate.
Enter answer in percents.
Correct Answer: 8.7
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Essentials Of Financial Management Text And Cases
Authors: George C Philippatos
1st Edition
0816267162, 978-0816267163
