Question: Problem 1.6 A bank offers a 3-month zero rate on investments of 3.1% and a for- ward rate of 3.9% for 3-month investments starting 3

 Problem 1.6 A bank offers a 3-month zero rate on investments
of 3.1% and a for- ward rate of 3.9% for 3-month investments

Problem 1.6 A bank offers a 3-month zero rate on investments of 3.1% and a for- ward rate of 3.9% for 3-month investments starting 3 months from now. If you agree to these rates, what will an investment of 500 dollars be worth in 6 months? to these rates, what will an investment of 500 dollars be worth in 6 months? Problem 1.7. In the previous problem, what is the 6-month zero rate that leads to the same rate of return

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