Zero-coupon bond prices are given by B(0,T ),where 0 is today,and T (measured in years)is the bond's maturity date.
-Suppose that you compute the simple forward rate over the time period that begins after one year and continues over the next day,and use it as an approximation to the continuously compounded forward rate.Then the value that you obtain is:

Question

Zero-coupon bond prices are given by B(0,T ),where 0 is today,and T (measured in years)is the bond's maturity date. 
-Suppose that you compute the simple forward rate over the time period that begins after one year and continues over the next day,and use it as an approximation to the continuously compounded forward rate.Then the value that you obtain is:

Quizplus · Accepted Answer

The simple forward rate for one day is calculated as 1/365, which is approximately 0.00274. When converted to a continuously compounded rate, it becomes ln(1 + 0.00274), which is approximately 0.042588.

Zero-Coupon Bond Prices Are Given by B(0,T ),Where 0 Is