Suppose that the prices of zero-coupon bonds with various maturities are given in the following...
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Accounting
Suppose that the prices of zero-coupon bonds with various maturities are given in the following table. The face value of each bond is $1,000. Maturity (Years) Price 1 $ 948.43 2 875.89 3 809.92 4 745.60 5 665.22
A. Calculate the forward rate of interest for each year. (Round your answers to 2 decimal places.)
b. How could you construct a 1-year forward loan beginning in year 3? (Round your Rate of synthetic loan answer to 2 decimal places.)
c. How could you construct a 1-year forward loan beginning in year 4? (Round your Rate of synthetic loan answer to 2 decimal places.)
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