Business Homework Solutions
#6724
Spot rates
Given the following forward rates, calculate the one,two,three and four year spot rates:
Forward time period ----- Forward rate
f0,1 ------- 10.0%
f1,2 ------- 9.5%
f2,3 ------- 9.0%
f3,4 ------- 8.5%
This solution calculated the spot rates given the forward rates.
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