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If the one-year spot rate is 7 percent and the two-year spot rate is 8.5 per- cent, what is the one-year forward rate over the second year?
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- 18. The 4-year spot rate is 9.45%, and the 3-year spot rate is 9.850%. What is the 1-year forward rate three years from today?The one-year spot rate is currently 4 percent; the one-year spot rate one year from now will be 3 percent; and the one-year spot rate two years from now will be 6 percent. Under the unbiased expectations theory, what must today's three-year spot rate be? Suppose the three year spot rate is actually 3.75 percent, how could you take advantage of this?The one year spot rate is currently 4 percent, the one year spot rate one year from now will be 3 percent, and the one year spot rate two years from now will be 6 percent. Under the unbiased expectations theory, what must today's three year spot rate be? Supposed the three year spot rate is actually 3.75 percent, how could you take advantage of this? Explain.
- All rates in this question use semi-annual compounding. You observe a two year spot rate of 5.10%, and a two to three year forward rate of 4.80%. What is the three year spot rate?The one year spot rate is currently 4 percent, the one year spot rate one year from now will be 3 percent, and the one year spot rate two years from now will be 6 percent. Under the unbiased expectations theory, what must today's three year spot rate be? Supposed the three year spot rate is actually 3.75 percent, how could you take advantage of this? Explain about how you could take advantage of it.,Three-month spot rate is 10% and one-year spot rate is 15%. What is the forward rate between three month and one year under pure expectations theory?
- The 5-year spot rate is 10.5% and the 4-year spot rate is 8.8% What is the 1-year forward rate, 4 years from today? Provide your answer, in percent (%) correct to TWO decimal placesThe one-year spot rate is currently 4%; the one-year spot rate one year from now will be 3%; and the one- year spot rate two years from now will be 6%. Under the unbiased expectations theory, what must today's three-year spot rate be? Suppose the three-year spot rate is actually 3.75%, how could you take advantage of this? Explain.According to the expectations theory, if the current three year rate is 3 per cent and the current four-year rate is 4 per cent, then the expected one-year rate three years from now should be about:
- What is the percent value of $2,725 per year, at a discount rate of 10%, if the first payment is recieved 8 years from now and the last payment is recieved 21 years from now?The one year spot rate is currently 4%, the one year spot rate one year from now will be 3%, and the one year spot rate two years from now will be 6%. Under the unbiased expectations theory, what must today's three year spot rate be? Supposed the three year spot rate is actually 3.75%, how could you take advantage of this? Explain.What is the present value of $200 per year, at a discount rate of 18.25 percent, if the first payment is received 6 years from now and the last payment is received 16 years from now?