Question: Suppose that zero interest rates with continuous compounding are as follows: Maturity (months) Rate (% per annum) 3 8.0 16 8.2 9 8.4 12 8.5


Suppose that zero interest rates with continuous compounding are as follows: Maturity (months) Rate (% per annum) 3 8.0 16 8.2 9 8.4 12 8.5 15 8.6 18 8.7 Question 1 1 pts What is the forward rate with continuous compounding for a three-month period starting in one year? Note: Enter the answer with 3 number after the decimal point). Question 2 1 pts What is the forward rate (computed in question 1) with quarterly compounding? (Note: Enter the answer with 3 number after the decimal point). Question 3 1 pts Considering the answer to the 2nd question, what is the value of an FRA where it will earn 9.5% for a three-month period starting in one year on a principal of $1,000,000? Note: Enter the answer with 2 numbers after the decimal point)
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