Assume that the five year spot rate is 10 percent a If
Assume that the five year spot rate is 10 percent a If
Assume that the five-year spot rate is 10 percent.
a. If the forward rate over the sixth year is currently at 7.5 percent, what is the six-year spot rate?
b. If the forward rate over the fifth year is currently at 9 percent, what is the four-year spot rate?