What are the rates with continuous compounding

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Reference no: EM13285439

The 6-month, 12-month, 18-month, and 24-month zero rates are 3.00%, 3.5%, 4%, and 4.5% with semi-annual compounding.

1. What are the rates with continuous compounding?
2. What is the forward rate for the 6-month period beginning in 12 months?
3. What is the value of an FRA that promises to pay you 5.5% (compounded semi-annually) on a principal of a $1 million for the six-month period starting in 12 months?

Reference no: EM13285439

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