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You are an assistant to the financial manager of Goodman Enterprises. Your boss is currently evaluating debt financing options for a new investment proposal. She
You are an assistant to the financial manager of Goodman Enterprises. Your boss is currently evaluating debt financing options for a new investment proposal. She asks you to calculate forward rates based on current zero-rates for the next 6 years. Calculate the forward rates for each of the following years and fill in the table. Give your answer as a percentage per annum to 1 decimal place. Zero-Rate Forward Rate Year (% pa) (% pa) 1 2.8 2 3.8 a) 5.9 3 4.5 b) 6.9 4 5.1 c) 7.6 5 5.6 d) 6.8 6 5.8 e) All rates are continuously compounded rates
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