Assume that as of today, the annualized interest rate for a twelve-year bond is 8 percent. Today’s annualized interest rate for a five-year bond is 6 percent. The annualized interest rate for a four-year bond expected in five years is 5 percent. Use only this information to estimate the annualized interest rate for a three-year bond expected in nine years. The interest rate for a twelve-year bond has a .10% liquidity premium. Use the geometric average method.
ANSWER IN THE IMAGE((YELLOW HIGHLIGHTED). FEEL FREE TO ASK ANY DOUBTS. THUMBS UP PLEASE.
Get Answers For Free
Most questions answered within 1 hours.