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The yield for a security maturing one year from now is 7 percent, and the yield for a security that matures two years from now

The yield for a security maturing one year from now is 7 percent, and the yield for a security that matures two years from now is 8 percent.Based on these two yields we can compute a forward rate.What are forward rates of interest? How are they determined?What do they have to do with indexes used to adjust ARM payments?

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