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johnpaech johnpaech
wrote...
Posts: 1098
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6 years ago
The forward rate for year 4 (the forward rate quoted today for an investment that begins in three years and matures in four years) is closest to:
A) 4.5%
B) 4.6%
C) 4.4%
D) 5.0%
Textbook 
Corporate Finance: The Core

Corporate Finance: The Core


Edition: 4th
Authors:
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wrote...
6 years ago
C
Explanation:  C) f4 =   - 1 = (1.050)4/(1.052)3 = 1.044 - 1 = 4.4%
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