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Year Forward rate Interest rate 1 2 3 10% 18% ( B ) 10.00% ( A ) 13.28% Figure out the 2-year interest rate (A)
| Year | Forward rate | Interest rate |
| 1 2 3 | 10% 18% ( B ) | 10.00% ( A ) 13.28% |
- Figure out the 2-year interest rate (A) based on the Expectations Hypothesis. (20points)
- Figure out the Year-3 forward rate (B) based on the Expectations Hypothesis. (20points)
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Valuation Workbook Step By Step Exercises And Tests To Help You Master Valuation
Authors: McKinsey & Company Inc.
7th Edition
1119611814, 978-1119611813
