Question: C. Given the data in the table and the information below, please answer the following parts. Show all working and formulas used. Maturity (1) (2)

C. Given the data in the table and the information below,

C. Given the data in the table and the information below, please answer the following parts. Show all working and formulas used. Maturity (1) (2) r(3) (5) (6) Spot Rate(%) 0.05 0.28 0.12 0.03 The forward rate for a 3-year loan beginning in 2 years is 0.067%. The forward rate for a 2-year loan starting in 3 years is -0.194%. 1) Please calculate the 3-year spot rate. [2 marks] 2) Please calculate the 2-year spot rate. [2 marks]

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