Suppose the Current Six-Year Spot Rate Is 8 Percent and the Current

question 56

Multiple Choice

Suppose the current six-year spot rate is 8 percent and the current five-year spot rate is 7 percent. What is the one year forward rate in five years?

• A) 12.62 percent
• B) 11.58 percent
• C) 13.14 percent
• D) 14.65 percent
• E) 15.14 percent