Question: Please do b. The answer is .1001. The following term structure is given as effective annual rates of me r's interest on zero coupon bonds
The following term structure is given as effective annual rates of me r's interest on zero coupon bonds 63.5 1-vear maturity: 6% 2-year maturity: 7% 3- year maturity: 9% (a) Find (i) the 1-year forward effective annual interest rate for a 1-year period, fi2) and (ii) the 2-year forward effective annual interest rate for a 1-year period, f2.31- (b) The effective annual rate of interest for a 4-year zero coupon bond is r. Find the minimum value ofr needed so that fi3.412fi2.31, where f34) is the 3-year forward effective annual interest rate for a 1-year period and f231 is found in part (a). representing
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