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  3. the n-year spot rate of interest yn is given by: y

The n-year spot rate of interest yn is given by: y 0.045 n/1000 for n...

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The n-year spot rate of interest yn is given by: y 0.045 n/1000 for n = 1,2, 3 and 4 Calculate, to 6 significant figures: (a) All possible one-year forward rates, (4 marks) (b) All possible two-year and three-year forward rates, (5 marks) (c) The price at time t 0, of a unitzero coupon bond with term 3 years; (2 marks) The implied 4-year par yield. (d) (4 marks) (Total 15 marks) The n-year spot rate of interest yn is given by: y 0.045 n/1000 for n = 1,2, 3 and 4 Calculate, to 6 significant figures: (a) All possible one-year forward rates, (4 marks) (b) All possible two-year and three-year forward rates, (5 marks) (c) The price at time t 0, of a unitzero coupon bond with term 3 years; (2 marks) The implied 4-year par yield. (d) (4 marks) (Total 15 marks)

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