A 10-year bond has a par coupon of 3% and a duration of 9.

A 5-year bond has a par coupon of 2% and a duration of 4.75.

What is the 5 year into 5 year forward rate?Please use just the information above.

Question 2

A 3-year bond has a par coupon of 4% and a duration of 2.75.

A 5-year bond has a par coupon of 3.5% and a duration of 4.5.

What is the 3-year into 2-year forward rate?

Question 3 - 

If you were driving to New York and wanted to estimate how long it would take you, explain how the inside view could help you estimate.I will tell you that the average driving time is 4 hours.

Your roommate is from Florida.You two are chatting and he/she says that she won't be buying a winter coat.You ask why.They respond that it is 75 degrees and she won't need one.It is October.Use a simple outside view to explain to her why that makes no sense.

Answer rating: 100% (QA)

Question 1 To find the 5year into 5year forward rate we can use the formula for the forward rate tex... View the full answer