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The one-year forward rate 1 year from today is 5%; the one-year forward rate 2 years from today is 5.5%; the one-year forward rate 3
The one-year forward rate 1 year from today is 5%; the one-year forward rate 2 years from today is 5.5%; the one-year forward rate 3 years from today is 6%; the one-year forward rate 4 year from today is 6.5%; and the one-year forward rate 5 years from today is 7%. What should the purchase price of a 2-year zero-coupon bond be if it is purchased at the beginning of year 2 and has face value of $1,000?
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