The Following Information Relates to Questions 16-29

Multiple Choice

The following information relates to Questions 16-29

-The one-year spot rate r(1) = 4%, the forward rate for a one-year loan beginning in one year is 6%, and the forward rate for a one-year loan beginning in two years is 8%. Which Of the following rates is closest to the three-year spot rate?

A) 4.0%
B) 6.0%
C) 8.0%