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If the one-year spot rate is 5% (R1) (APR) and Two-year spot rate is 5.5% (R2) (APR)

If the one-year spot rate is 5% (R1) (APR) and Two-year spot rate is 5.5% (R2) (APR) calculate the one-year rate one-year (Forward rate)(FR1) from today using pure expectations theory.


SOLUTION PREVIEW
FR1 = [(1+Rn)^n/(1+Rn-1)^n-1] - 1


File name If the one-year spot rate is 5%.xlsx    File type: xlsx  PRICE: $2