If the One-Year Spot Interest Rate Is 8 Percent and the Two-Year

question 46

Multiple Choice

If the one-year spot interest rate is 8 percent and the two-year spot interest rate is 9 percent, calculate the one-year forward interest rate one year from today.

• A)10 percent
• B)10.5 percent
• C)11 percent
• D)11.5 percent