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relation between spot rates and discount rates

  • Thread starter Thread starter prxthm
  • Start date Start date
Joined
11/6/20
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HEY I am really confused with this question I dont even know the formula please someone help, thank you :)


Suppose the spot rates for 1 and 2 years are s 1 = 6.3 % and s 2 = 6.9 % with annual compounding. interest rates are quoted on an annual basis unless otherwise specified. What is the forward rate, f1,2 assuming annual compounding? Please submit your answer as a percentage rounded to one decimal place so, for example, if your answer is 8.789% then you should submit an answer of 8.8.
 
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