Question: Forward Rate. (14 points) Find current one-month forward rate (or future rate). (3 points) Identify whether the forward rate is at a premium or discount

Forward Rate. (14 points)

  1. Find current one-month forward rate (or future rate). (3 points)
  2. Identify whether the forward rate is at a premium or discount to spot rate, and by how many basis points. (6 points)
  3. Wait for one month, find the market rate next month, and compare with the forward rate you found above. Is the forward rate a good predictor of the forward rate? (5 points)

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