Question: Suppose that zero interest rates with continuously compounding are as follows: Maturity Zero rate Forward rate (years) (% per annum) (%) 0.5 4 1.0 4.55

Suppose that zero interest rates with continuously compounding are as follows:

Maturity Zero rate Forward rate

(years) (% per annum) (%)

0.5 4

1.0 4.55

1.5 4.85

2.0 5.2

Calculate one-year, 1.5-year, and two-year forward rates.

No excel please

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