Question: Problem 3 Suppose that rish-free zero interest rates with continuous compounding are as follows: Calculate forward interest rates for the second, thind, fourth, and fifh

Problem 3 Suppose that rish-free zero interest rates with continuous compounding are as follows: Calculate forward interest rates for the second, thind, fourth, and fifh years. Problem 4 Use the risks free rates in the prewtous Problem. You are entering an FRA wil'se you will pay 5% (anmually, compounded) for the third year and receive LIBOR on SI million. The forward WBOR rate (anually compounded) for the third year is 5.5%. What is the value of the FRA today

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