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If a 2 year spot rate contract (Strategy 1) has an interest rate of 5%...

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If a 2 year spot rate contract (Strategy 1) has an interest rate of 5% per year and an alternative strategy (Strategy 2) has a one year spot rate of 6% and an implied forward interest rate of 7.5% (1f2) what would occur (assume a well functioning market)?

uestions 5. If a 2 year spot rate contract (Strategy 1 ) has an interest rate of 5% per year and an alternative strategy (Strategy 2) has a one year spot rate of 6% and an implied forward interest rate of 7.5%(f2) what would occur (assume a well functioning market)

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