QUESTION Suppose that zero interest rates with continuous compounding are as follows: Maturity (months) Rate % per annum) 3 6.0 6 6.1 9 6.3 12 6.4 15 6.5 18 6.6 96 Calculate forward interest rates for enter the answer in percentage rounded to two decimals places) The second quarter The third quarter % The fourth quarter 90 + QUESTION 7 The compounding frequency for an interest rate defines The frequency with which interest is paid O A unit of monsurement for the interest rate The relationship between the annual interest rate and the monthly interest rate None of the above QUESTIONS Which of the following is true of LIBOR The LIBOR rate is free of credit risk ALIBOR rate is lower than the Treasury rate when the two have the same maturity It is a rate used when borrowing and lending takes place between banks It is subject to favorable tax treatment in the US