Find the One-Year Forward Rate for Year Three Given the Following

question 46

Multiple Choice

Find the one-year forward rate for year three given the following zero coupon rates:

• A) 3.51%
• B) 4.26%
• C) 4.86%
• D) 4.56%

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Definitions:

Financing

The process of providing or securing funds for business activities, making purchases, or investing.

ABC Bank

A hypothetical name often used to refer to a generic or unspecified bank in examples or case studies.

Federal Food, Drug, and Cosmetic Act

A set of laws passed by Congress giving authority to the U.S. Food and Drug Administration (FDA) to oversee the safety of food, drugs, and cosmetics.

United States Food and Drug Administration

A federal agency responsible for protecting public health by assuring the safety, efficacy, and security of human and veterinary drugs, biological products, and medical devices.