The term structure of interest rates is upward-sloping. Put the following in order of magnitude: (a) The
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The term structure of interest rates is upward-sloping. Put the following in order of magnitude:
(a) The 5-year zero rate
(b) The yield on a 5-year coupon-bearing bond
(c) The forward rate corresponding to the period between 4.75 and 5 years in the future.
What is the answer when the term structure of interest rates is downward-sloping?
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