Financial Risk Manager Part 1
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A financial analyst at a fixed-income investment fund is tasked with creating a risk-free forward rate curve. The analyst has provided the following term structure for risk-free spot rates:
| Spot Rates | Time (T) |
|---|---|
| 2.5% | 4 |
| 2.0% | 5 |
| 1.5% | 6 |
| 1.0% | 10 |
| 0.5% | |
| 0.0% | |
| -0.5% |
Based on the given spot rates, determine which chart most accurately portrays the 1-year forward rate curve starting from each time T?