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Find a 1-year forward interest rate

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Reference no: EM133110553

All interest rates are annual interest rates with semi-annual compounding unless specified otherwise. All coupon rates are annual coupon rates paid semi-annually unless specified otherwise.

Problem: Find a 1-year forward interest rate if the price of a 6-months 6% coupon bond is $99 and the price of a 1-year 8% coupon bond is $102. All bonds have $100 face values. Keep at least 6 decimal digits for all calculations

Reference no: EM133110553

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