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Basic Question 0 of 4
What is the six-month forward rate six years from now if the six-year spot rate is 7.25% and the 6.5-year spot rate is 7.38%?
B. 7.51%
C. 8.946%
A. 7.31176%
B. 7.51%
C. 8.946%
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Craig Baugh
Learning Outcome Statements
explain the relationships between the values of a callable or putable bond, the underlying option-free (straight) bond, and the embedded option;
describe how the arbitrage-free framework can be used to value a bond with embedded options;
CFA® 2025 Level II Curriculum, Volume 4, Module 28.