Question
The yields on 1-year, 2-year and 3-year, risk-free, zero-coupon bonds are =2%, =2.5% and =3%, respectively. What are the 1-year and 2-year forward rates (1
The yields on 1-year, 2-year and 3-year, risk-free, zero-coupon bonds are =2%, =2.5% and =3%, respectively.
What are the 1-year and 2-year forward rates (1 = 1 / 2 -1 and 2 = 2 /3 -1)?
Under the expectations hypothesis, what is the expected 1-year spot interest rate 2 years from now?
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