How do I solve this?
This question has part a through d and, not so sure how to go about answering.
- Attachment 1
- Attachment 2
FOUR DEC1. You are given the following benchmark spot rates: (Total 20 points)MaturitySpotrate2.90%N3.20%3.60%4.20%a. Compute the forward rate between years 1 and 2. (5 points)Inb. Compute the forward rate between years 1 and 3. (5 points)