Question: Given that the following Zero rate with semiannual compounding: (a) What are the rates with continuous compounding? ( 8 points) (b) What is the forward

Given that the following Zero rate with semiannual compounding: (a) What

Given that the following Zero rate with semiannual compounding: (a) What are the rates with continuous compounding? ( 8 points) (b) What is the forward rate expressed with continuous compounding and semiannual compounding for the 6-month period beginning in 1.5 years? (4 points) (c) What is the value of an FRA that promises to pay 7% (compounded semiannually) on a principal of $1 million for the 6-month started in 1.5 years? (8 points)

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