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    Exam 3: Valuing Bonds
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    If the 3-Year Spot Rate Is 10
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If the 3-Year Spot Rate Is 10

Question 3

Question 3

Multiple Choice

If the 3-year spot rate is 10.5% and the 2-year spot rate is 10%, what is the one-year forward rate of interest two years from now?


A) 3.7%
B) 9.5%
C) 11.5%
D) None of the above

Correct Answer:

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