Question: 1. Explain how a two-period spot rate can be used to revea the implicit one-period forward rate, given the current single-period spot rate 2. Explain

1. Explain how a two-period spot rate can be used to revea the implicit one-period forward rate, given the current single-period spot rate

2. Explain the interest rate forecast provided by a normal yield curve

3. Explain the hedging effect 1. Explain how a two-period spot rate can be used to

Please give the most clear and simple answer as this is what might appear in the exam. Thank you very much

Topic 8: Interest Rate Risk and FRAS ' Explain how a two-period spot rate can be used to reveal the implicit one-period forward rate, given the current single-period spot rate Explain the interest rate forecast provided by a normal yield curve . Explain the hedging effect of a 1r4 FRA @ 3% arranged in February for the issuer of 90-day BABs with a face value of $100m

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