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CFA Level I The Term Structure of Interest Rates: Spot, Par, and Forward Curves question

Fixed Income / 9. The Term Structure of Interest Rates: Spot, Par, and Forward Curves

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The Term Structure of Interest Rates: Spot, Par, and Forward Curves sample question

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Fixed Income

9. The Term Structure of Interest Rates: Spot, Par, and Forward Curves

The 1-year spot rate is 3.00%, and the 2-year annual spot rate is 4.00%. Assuming annual compounding, the 1-year forward rate beginning one year from today is closest to:

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