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Question
A one-year STRIPS sells at an interest rate of 3.54 percent and a two-year STRIPS sells at an interest rate of 3.49 percent. What is the implied one year forward rate? Assume the rates are effective annual rates.A. 3.44 percent
B. 3.50 percent
C. 3.54 percent
D. 3.57 percent
E. 3.60 percent
Answer
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