CFA Practice Question

CFA Practice Question

Today the rate for investing for 1 year is 5.1%. The forward rates for investing for 1 year are: 1 year from now: 5.2% 2 years from now: 5.29% The spot rate today for two years is:
A. 0.0518
B. 0.0515
C. 0.0525
Explanation: Spot rate =((1+0.051)*(1+0.052))^0.5 - 1

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