The spot rates for three hypothetical zero-coupon bonds (zeros) with maturities of one, two, and three years
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The spot rates for three hypothetical zero-coupon bonds (zeros) with maturities of one, two, and three years are given in the following table.
Calculate the forward rate for a one-year zero issued one year from today, f1,1.
Transcribed Image Text:
Maturity (7) Spot rates 1 Z1 = 9% 2 Z₂ = 10% 3 23 = 11%
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