What average annual rate of interest would you receive

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Reference no: EM131341354

Given below are the yields to maturity on a 5-year bond:

Years to maturity	Yield to maturity
1	8.0
2	9.0
3	10.0
4	10.5
5	10.8

A. What is the implied forward rate of interest for the third year?

B. What (geometric) average annual rate of interest would you receive if you bought a bond at the beginning of the third year and sold it at the beginning of the fifth year?

Reference no: EM131341354

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