The bank forecasts the following one-year interest rates one, two, and three years in the future: 4.56%, 4.78%, and 4.98. The current four-year interest rate is 4.71%. Estimate the current one-year interest rate. Show all calculations please.

• A. 4.5%
• B. 4.6%
• C. 4.7%
• D. none of the above.

The bank forecasts the following one-year interest rates one and two years in the future: 3.80% and 4.20%. The current three-year interest rate is 4.20%. Estimate the current one-year interest rate.

• A. 4.4%
• B. 4.6%
• C. 4.8%
• D. none of the above.

Answer rating: 100% (QA)

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