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Suppose the Current Six-Year Spot Rate Is 8 Percent and the Current

Question 56

Multiple Choice

Suppose the current six-year spot rate is 8 percent and the current five-year spot rate is 7 percent. What is the one year forward rate in five years?


A) 12.62 percent
B) 11.58 percent
C) 13.14 percent
D) 14.65 percent
E) 15.14 percent

Correct Answer:

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