The Two-Year Zero Rate Is 6% and the Three Year

question 8

Multiple Choice

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.

• A) 6.75%
• B) 7.0%
• C) 7.25%
• D) 7.5%

---

Definitions:

Spotless Perfectionists

individuals who strive for flawless cleanliness and perfect results in all they do.

Slobs

People who are messy, disorganized, and tend to neglect cleanliness and order.

Transitional Expression

Words or phrases used to link sentences, clauses, or paragraphs, helping to smoothly guide the reader or listener from one idea to the next in written or spoken communication.

"Difficult" Babies

Infants who exhibit challenging behaviors such as excessive crying, irregular feeding and sleep routines, often requiring more attention and patience.