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why do we have to put (1.1696) to the power pf 1/4? where does that 1/4 come from in the formula and also why do
why do we have to put (1.1696) to the power pf 1/4? where does that 1/4 come from in the formula and also why do we bave to use that (12 Points) You are thinking about purchasing a 4-year zero-coupon bond with a face value of $100. The following information is available from a well-known financial website. 2-year spot rate is 3% rerum Getring Precenty Forward rate f2.2 = 5% ZB is geo arruge forward we "B-4-2 Of 2B a. What is the 4-year Spot rate?(24) (tza) * (1 + FA, B-A) B-A = (1HZB) B (1 + Z2)X (1+82,2)2 = (1+zu)" (1.03) 2x (1.05)2 = (Itzu)" (1.1696)/4= Itzy 0.03995=1+ 2y + zu =. Zu = 3.995), +Z4
why do we have to put (1.1696) to the power pf 1/4? where does that 1/4 come from in the formula and also why do we bave to use that
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