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Two banks want to trade a 6x24 month forward rate agreement. The comtinuously compounded spot rates are: 6 months, 5% . One year, 5.1% .
Two banks want to trade a 6x24 month forward rate agreement. The comtinuously compounded spot rates are: 6 months, 5% . One year, 5.1% . 18 months, 5.4% . And two years, 5.5%. All anual rates. What rate will the bank use in their forward rate agreement.
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