Question: As in the previous problem, consider holding a 3-year bond for 2 years. Nowsuppose that interest rates can change, but that at time 0 the

As in the previous problem, consider holding a 3-year bond for 2 years. Nowsuppose that interest rates can change, but that at time 0 the rates in Table 7.1 prevail. What transactions could you undertake using forward rate agreements to guarantee that your 2-year return is 6.5%?
In table 7.1

Continuously Years to Zero-Coupon Zero-Coupon One-Year Implied Maturity Bond Yield ond Price 0.943396 0.881659 0.816298 Forward Rate 6.00000% 7.00236 8.00705 Par Compounded Coupon 6.00000% 6.48423 6.95485 Zero Yield 6.00% 6.50 7.00 5.82689% 6.29748 6.76586

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