The strip yield curve today looks as follows (all yields are APRs with semi-annual compounding):

1-year strip has a yield to maturity of 1.5%,

2-year strip has a yield to maturity of 2%,

3-year strip has a yield to maturity of 3%,

4-year strip has a yield to maturity of 4%

What is forward rate you can lock in today (expressed as an APR with sem-annual compounding) for the 1-year period starting in 3 years time?

Answer rating: 100% (QA)

To calculate the forward rate for the 1year period starting in 3 years time we can use the in... View the full answer