A the 10-year spot interest rate the longer of the spot, Ask an Expert

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A) The 10-year spot interest rate (the longer of the spot rates, or the n-year rate) is 6.92% and the 2-year (k-year) forward rate expected (n - k) years from now has been estimated to be 5.32%. What is the other spot rate you need to know to find the forward rate given above using the pure expectations theory? Round to the nearest 0.01%.

B) The 2-year spot interest rate is 4.51%, the 2-year forward rate expected 2 years from now has been estimated to be 5.38%. What is the other spot rate you need to know to find the forward rate given above using the pure expectations theory? Round to the nearest 0.01%.

C) The 8-year spot interest rate is 5.37%, the 2-year spot rate is 4.61%. What is the forward rate you can find using the pure expectations theory? Round to the nearest 0.01%.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92433933

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