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Use the following information on government bond yields for Questions 1-5. Time Period Oyly Oy2y Oy3y Oy4y Oy5y Rate 4% 5% 6% 7% 8% 1.
Use the following information on government bond yields for Questions 1-5. Time Period "Oyly" "Oy2y" "Oy3y" "Oy4y" "Oy5y" Rate 4% 5% 6% 7% 8% 1. What is the 2y2y implied forward rate? 2. What is the 3yly implied forward rate? 3. What is the ly4y implied forward rate? 4. You are considering the purchase of a government bond that will pay you $1000 in exactly 5 years. Given the rates in the table above, what do you expect the bond's value to be in exactly 1 year? 5. Consider the same bond as described in Question #4. What do you expect the price of the bond to be in exactly 4 years
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