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The yields on 1-year, 2-year and 3-year, risk-free, zero-coupon bonds are 4%, 3% and 2%, respectively. What are the 1-year and 2-year forward rates (
- The yields on 1-year, 2-year and 3-year, risk-free, zero-coupon bonds are 4%, 3% and 2%, respectively.
- What are the 1-year and 2-year forward rates (f1 and f2)?
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- What does the expectations hypothesis tell us about the future 1-year spot interest rate one year after?
- What does the expectations hypothesis tell us about the future 1-year spot interest rate two years after?
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Global Business Today
Authors: Charles Hill
7th Edition
0078137217, 9780078137211
