With reference to the data above, the implied one-year forward rate (expected one-year rate one year from now) on Treasuries is
A) 4.67%
B) 5.83%
C) 5.58%
D) 4.09%

Question

Quizplus · Accepted Answer

The implied one-year forward rate can be calculated using the formula for forward rates: (1 + longer-term rate)^n / (1 + shorter-term rate)^(n-1) - 1. Assuming the data above provides the necessary rates, choice B (5.83%) is the correct forward rate calculation.

With Reference to the Data Above, the Implied One-Year Forward