11-86 If the Spot Interest Rate on a Prime?rated One-Month

question 70

Multiple Choice

11-86 If the spot interest rate on a prime?rated one-month CD is 6 percent today and the market rate on a two-month maturity prime?rated CD is 7 percent today,the implied forward rate on a one-month CD to be delivered one month from today is

• A)9 percent.
• B)11 percent.
• C)18 percent.
• D)10 percent.
• E)8 percent.

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