Problem in Forecasting Interest Rates based on unbiased expectations theory: These are the rates today (June 15,...

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Problem in Forecasting Interest Rates based on unbiasedexpectations theory:
These are the rates today (June 15, 2018) for loans of equalrisk.
R1 = 2%;
R2 = 3%
R3 = 4%
R4 = 5%
A. Given this information, calculate one-year forward rate for aone-year loan beginning 6/15/19 and ending on 6/15/20

B. Calculate the two-year forward rate for a one-year loanbeginning 6/15/20 and ending on 6/15/21

C. Calculate the three-year forward rate for a one-year loanbeginning 6/15/21 and ending on 6/15/22

D. Calculate the two-year forward rate for a two-year loanbeginning 6/15/20 and ending on 6/15/22

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a Annualized Forward rate of 1 years 1 years from now 12 Year rate211 Year rate11 Annualized Forward rate of 1 years 1 years from now10032100211 Annualized See Answer

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Problem in Forecasting Interest Rates based on unbiasedexpectations theory:These are the rates today (June 15, 2018) for loans of equalrisk.R1 = 2%;R2 = 3%R3 = 4%R4 = 5%A. Given this information, calculate one-year forward rate for aone-year loan beginning 6/15/19 and ending on 6/15/20B. Calculate the two-year forward rate for a one-year loanbeginning 6/15/20 and ending on 6/15/21C. Calculate the three-year forward rate for a one-year loanbeginning 6/15/21 and ending on 6/15/22D. Calculate the two-year forward rate for a two-year loanbeginning 6/15/20 and ending on 6/15/22