Question: You observe two zero coupon spot yields: 2yr = 2% and 3yr = 3%. What is the 1yr forward rate starting in 2 yrs? A.

  1. You observe two zero coupon spot yields: 2yr = 2% and 3yr = 3%. What is the 1yr forward rate starting in 2 yrs?

    A.

    3.03%
    B.

    4%
    C.

    2.5%
    D.

    5.03%

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