Question

Suppose you observe the following effective annual zero-coupon bond yields: 5.08% (1-year), 4.55% (2-year), 3.97% (3-year)....

Suppose you observe the following effective annual zero-coupon bond yields: 5.08% (1-year), 4.55% (2-year), 3.97% (3-year). Compute r 0(2,3), the 1-year implied forward rate for year 3.

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