Business

6 August, 05:29

Suppose the 8-year spot rate (r8) is 2.0% and the 10-year spot rate (r10) is 3.0%. Which rate is closest to the forward rate that begins in 8 years and last for 2 years (8f2)

1. 1.0%

2. 2.5%

3. 4.0%

4. 7.0%

5. The forward cannot be determined

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