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Question
The following is information on current spot and forward term structures (assume the corporate debt pays interest annually):
Calculate the value of y (the implied forward rate on one-year maturity BBB corporate debt to be delivered in one year).
A. 6.53 percent.
B. 10.83 percent.
C. 5.75 percent.
D. 6.925 percent.
E. 1.017 percent.
Answer
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