- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 2. Time Value of Money in Finance
- Subject 4. Cash Flow Additivity
CFA Practice Question
Suppose the current forward curve for 1-year rates is 0y1y=2%, 1y1y=3%. The 2-year implied spot rates are ______. A. 2.4%
B. 2.5%
C. 2.6%
Correct Answer: B
(1.02 x 1.03) = (1 + r2)2; r2 = 0.0250.
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