Question: The two-year zero rate is 6% and the three-year zero rate is 6.5%. What is the forward rate for the third year? All rates are

The two-year zero rate is 6% and the three-year zero rate is 6.5%. What is the forward rate for the third year? All rates are continuously compounded.

Select one:

a. 6.75%

b. 7.0%

c. 7.25%

d. 7.5%

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