The current 24 60 forward rate is 4 p a s a the current 5 year zero rate is 6 p a s a What is the implied 2 year zero rate (b) What do the 2 year and 5 year zero rates in (a) imply about the well being of the economy going forward Very briefly Explain (c) IBM is currently selling at $100 share The 3 month single stock futures price on IBM is $101 Assuming that IBM will not pay any dividends during the next 3 months and the company is subject to zero short selling pressure (stock lending fee is zero), can we say that, based on the the stock is expected to rise by 1 over the next three months

Question: The current 24 60 forward rate is 4% p.a. s.a.; the current 5-year zero rate is 6% p.a. s.a. What is the implied 2-year

The current 24 × 60 forward rate is 4% p.a. s.a.; the current 5-year zero rate is 6% p.a. s.a. What is the implied 2-year zero rate?

(b) What do the 2-year and 5-year zero rates in (a) imply about the well-being of the economy going forward? Very briefly Explain.

Assuming that IBM will not pay any dividends during the next 3 months and the company is subject to zero short-selling pressure (stock lending fee is zero), can we say that, based on the the stock is expected to rise by 1% over the next three months?

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