Question: The current one year spot rate is 2% and the current three year spot rate 10 puntos is 6%.Given this information, what is the highest

The current one year spot rate is 2% and the current

The current one year spot rate is 2% and the current three year spot rate 10 puntos is 6%.Given this information, what is the highest two-year spot rate that is consistent with no-arbitrage in the term structure? (Hint: you need to make sure that the forward rates are not negative.) 8.53% O 9.13% 9.25% 9.36% O 9.74%

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