Implied forward rates are breakeven rate

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Reference no: EM131012035

We use no arbitrage to calculate implied forward rates from the spot curve. What does mean when we say that implied forward rates are breakeven rates? What do we use implied forward rates for? Are expectations of future interest rates the only factor that drives the yield curve?

Reference no: EM131012035

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Implied forward rates are breakeven rate : We use no arbitrage to calculate implied forward rates from the spot curve. What does mean when we say that implied forward rates are breakeven rates? What do we use implied forward rates for? Are expectations of future interest rates the only factor..

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