Question: Look at the spot interest rates shown in Problem 25. Suppose that someone told you that the five-year spot interest rate was 2.5%. Why would

Look at the spot interest rates shown in Problem 25. Suppose that someone told you that the five-year spot interest rate was 2.5%. Why would you not believe him? How could you make money if he was right? What is the minimum sensible value for the five-year spot rate?

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