lets say that you have two securities, a 4.0% one year security, and a 3.0% two year security.
1 - What is the interest rate on a one year security to be issued a one year from today??
2 - What is the one year forward rate??
3 - Is there an increasing or a decreasing trend in interest rate levels.
4 - Assume that you are serious about taking a loan and buying an apartment. Would you do now or wait for next year?
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