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Suppose you want to start a business in three years and you need a loan...

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Finance

Suppose you want to start a business in three years and you need a loan for four years once the business is created (for years 4, 5, 6, and 7). The bank has told you that the three-year rate is 7%, the four-year rate is 7.5%, the five-year rate is 7.8%, the six-year rate is 8% and the seven-year rate is 8.5%. What is the forward rate in year 4, 5, 6, and 7, respectively?

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