The two-year zero rate is 2% and the four-year zero rate is 3%. What is the forward rate for an investment starting at the end of the second year and maturing at the end of the fourth year? All rates are quoted per annum and continuously compounded. Give your answer per annum with continuous compounding.

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Solution e 2year rate 2 years from now N e 4year rate N e 2year rate N e 2year r... View the full answer