Use the Zero-Coupon Bond Prices Given in the Following Table

question 13

Multiple Choice

Use the zero-coupon bond prices given in the following table to answer the questions that follow.
-Use the discrete time model of the text,where a forward rate agreement (FRA) pays based on the spot rate of interest.Consider an FRA with maturity time 3.What is the FRA rate?

• A) 0.02000
• B) 0.02222
• C) 0.02445
• D) 0.03122
• E) 0.03355

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