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You have the following information on LIBOR rates: One-year spot rate is 4% per year. Forward rate in the second year is 6% per year.
You have the following information on LIBOR rates: One-year spot rate is 4% per year. Forward rate in the second year is 6% per year. What must be the annualized two-year spot LIBOR rate?
a. | 3.99% | |
b. | 5.05% | |
c. | 4.99% | |
d. | 4.50% |
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