Question: solve the third part ( graph) Suppose we observe the following rates: IRI E/2r1) E(3rl) E(41) E(5rl) E(6rl) 0.91% 3.50% 3.87% 5.35% 5.65% 6,42% a)
Suppose we observe the following rates: IRI E/2r1) E(3rl) E(41) E(5rl) E(6rl) 0.91% 3.50% 3.87% 5.35% 5.65% 6,42% a) If the unbiased expectation theory of term structure of interest rates holds, Compute the following rates: 0.919 IRI 1R2 1R3 1R4 IRS 1R6 b) Graph the Yield Curve C) Comment on the graph
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