Question
The yield curve shows that the forward rates for the next 3 years are 8%, 10% and 12%, respectively. You are offered a deal that
The yield curve shows that the forward rates for the next 3 years are 8%, 10% and 12%, respectively. You are offered a deal that will pay you 1000 in a year from today, and will increase by 100 each of the following 2 years. What is the deal worth today?
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Public Finance And Public Policy
Authors: Jonathan Gruber
2nd Edition
0716766310, 9780716766315
