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**Question 62** A portfolio manager has observed continuously compounded spot rates of 3.91% for a 5-year bond and 4.09% for a 5½-year bond. What is the forward rate for the time period between 5 and 5½ years? | Financial Risk Manager Part 1 Quiz - LeetQuiz

Explanation:

\frac{(0.0409 \times 5.5) - (0.0391 \times 5.0)}{(5.5 - 5.0)} = 5.89\%

(Book 4, Module 56.2, LO 56.c)

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Financial Risk Manager Part 1

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Question 62

A portfolio manager has observed continuously compounded spot rates of 3.91% for a 5-year bond and 4.09% for a 5½-year bond. What is the forward rate for the time period between 5 and 5½ years?

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Financial Risk Manager Part 1

Get started today

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Question 62 A portfolio manager has observed continuously compounded spot rates of 3.91% for a 5-year bond and 4.09% for a 5½-year bond. What is the forward rate for the time period between 5 and 5½ years?

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Question 62

A portfolio manager has observed continuously compounded spot rates of 3.91% for a 5-year bond and 4.09% for a 5½-year bond. What is the forward rate for the time period between 5 and 5½ years?