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- Topic: Forward rate question
|Author||Topic: Forward rate question|
Could you please help me solve the following question :
Consider two annual bonds, each with two years to maturity. Bond A has a 7 % coupon and a price of 1,000.62$. bond B has a 10% coupon and a price of 1,055.12$. Find the two one-period forward rates that must hold for these bonds.
Answer : 6,08 % and 7.92 %