Reminder: please answer in excel format

1 ) You are requested to compute forward rate for the assigned forward period?

(forward period assigned = 57 to 61 - month period)

2) If you have an investment of RM50,000 invested at the estimated forward rate in (a) with continuous compounding for 5 years, how much will it grow?

3) Please interpret what the result in (b) means to investors/traders.

Interest rates for various maturity periods are given in TABLE 1 below. TABLE 1 Durations (months) 3 6 9 12 15 18 21 24 27 30 33 Average Long-Term Rates (p.a.) 3% 3.50% 4.00% 4.50% 5.00% 5.50% 6.00% 6.50% 7.00% 7.50% 8.00% 8.50% 9.00% 9.50% 10.00% 10.50% 11.00% 11.50% 12.00% 12.50% 13.00% 13.50% 36 39 42 45 48 51 54 57 60 61 62 Interest rates for various maturity periods are given in TABLE 1 below. TABLE 1 Durations (months) 3 6 9 12 15 18 21 24 27 30 33 Average Long-Term Rates (p.a.) 3% 3.50% 4.00% 4.50% 5.00% 5.50% 6.00% 6.50% 7.00% 7.50% 8.00% 8.50% 9.00% 9.50% 10.00% 10.50% 11.00% 11.50% 12.00% 12.50% 13.00% 13.50% 36 39 42 45 48 51 54 57 60 61 62