Question: Answer should be Spot: 7.42 Forward 7.595 Problem 5 Given the following spot rates and forward rates (in percents) for the effective years: Rate/Year 1

Answer should be

Spot: 7.42

Forward 7.595

Problem 5 Given the following spot rates and forward rates (in percents) for the effective years: Rate/Year 1 2 3 4 5 6 7 8 9 10 Spot 5 6 7 7 6 8 9 6 4 3 Forward 2 7 6 5 4 8 8 9 4 2 Find the present value factor of an annuity immediate under both schemes. (These figures may not match because the rates aren't designed to match.)

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