The current one-year interest rate is 7 percent and the current twoyear interest rate is 6 percent.
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The current one-year interest rate is 7 percent and the current twoyear interest rate is 6 percent. What is the implied forward rate for next year’s one-year rate?
a. 7 percent
b. 6 percent
c. 5 percent
d. 4 percent.
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Related Book For
Fundamentals Of Investments Valuation And Management
ISBN: 9781266824012
10th Edition
Authors: Bradford Jordan, Thomas Miller, Steve Dolvin
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