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You are interested in buying $ 1,000 5% par-value bonds having annual coupons. The one-year bond yields 2.0%; two-year bond yields 3.0%; three-year bond yields
You are interested in buying $ 1,000 5% par-value bonds having annual coupons. The one-year bond yields 2.0%; two-year bond yields 3.0%; three-year bond yields 4%; and four-year bond yield 5%. Determine the implied forward rate f[2,4]. Note: use formula not excel.
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