CFA Practice Question

There are 490 practice questions for this study session.

CFA Practice Question

What is the six-month forward rate six years from now if the six-year spot rate is 7.25% and the 6.5-year spot rate is 7.38%?

A. 7.31176%
B. 7.51%
C. 8.946%
Correct Answer: C

(1+.0738/2)13 / (1+.0725/2)12 -1 = 1.60169/1.53311 -1 = 1.04473;
Annual = 4.473% x 2 = 8.946%

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