Question
You would like to know what the market expects the 1 year rate will be three years from now. You observe the following yield curve
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You would like to know what the market expects the 1 year rate will be three years from now. You observe the following yield curve for discount, or zero-coupon, bonds:
| Maturity | Yield to Maturity |
| 1 | 7.1% |
| 2 | 7.6% |
| 3 | 7.6% |
| 4 | 10.1% |
What is the forward rate between year 3 and 4?
Please express your answer as a percent without the percentage sign so for 10.32% please enter 10.32]
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Financial Management Principles And Practice
Authors: Timothy Gallagher
6th Edition
1930789157, 978-1930789159
