In fixed-income, reading 44, question n°3 of EOC:
The answer states that the middle point of the third nodes can be estimated by the 1-year forward rate one year from now.
It seems wrong to me. Isn’t it supposed to be approximately equal to the 1-y forward two years from now? Can anyone confirm?
Thank you.
Yes: the 1-year forward rate starting 2 years from today.
I have the same question.
But in the textbook, it also says “one-year forward rate one year from now”.
in the Schewser notes, it was f(2,1) though.
so…i’m confused
It’s a misprint in the CFA Institute text.
I’d encourage you to write them and mention it.