What is three-year market rate of interest

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Question 1: If somehow the yield curve's assumptions hypothesis is right and that there is no risk premium, with a forward interest rate of 6.8percentage p.a. should be considered the investor forecast. In the event that the While the standards hypothesis is right, there is a risk premium.Until proceeding to the next phase, the risk premium must be withdrawn computation Assume that the six-month rate is risk-free.However, the one-year rate has a risk premium of The one-year rate of interest, irrespective of the cost of capital, is 0.1 percent per annum. Is 6.4% per annum

Question 2: Assume that zero coupon bonds with fixed rates of one, two, and three years from now are priced at 95, 88, and 80 Euro, respectively. What is the one-, two-, and three-year market rate of interest? What are the rates? Make a bond market. A 95 Euro investment is required for the one-year bond. encompasses a one-year receipt of 100 Euro 1,0526 = 100/95. This translates to a place one-year rate of interest of 5,26%. During the. An interest of 88 Euro in a 2 different debt returns a. After two years, you can get a payment of 100 Euro.

Reference no: EM132899734

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