The market is quoting: 6-month (182-day) CAD 1.25% 12-month (366-day) CAD 1.55% What is the 6x12 rate in CAD?

Name: The market is quoting: 6-month (182-day) CAD 1.25% 12-month (366-day) CAD 1.55% What is the 6x12 rate in CAD?
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The 6x12 rate can be calculated using the formula:

(1 + 6-month rate)^0.5 x (1 + 12-month rate)^0.5 - 1

Substituting the given rates, we get:

(1.0125)^0.5 x (1.0155)^0.5 - 1 = 0.01835 or 1.835%

Therefore, the answer is D.

The Market Is Quoting: 6-Month (182-Day) CAD 1