Suppose the Current 6 Year Spot Rate Is 8% and the Current

question 8

Multiple Choice

Suppose the current 6 year spot rate is 8% and the current 5 year spot rate is 7%.What is the one year forward rate in five years?

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

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Definitions:

Alkene

A hydrocarbon that contains at least one carbon-carbon double bond, characterized by the general formula CnH2n.

Heat Of Hydrogenation

The heat released during the addition of hydrogen to a double or triple bond in unsaturated hydrocarbons.

(E)-2-Pentene

An alkene that has the two largest groups on each end of the double bond in opposite directions, which is the trans configuration.

(Z)-2-Pentene

An alkene where the two largest groups on each side of the double bond are on the same side, resulting in a cis configuration.