Reading 43, Example 4, Time 2, Page 294

cfa_newbieMY · March 9, 2015, 2:01pm

In Time 2 Paragraph 2, it states that (0.5)(0.9245)/(1.04602) + (0.5)(0.9429) / 1.04602 = 0.8923

Why is the forward rate of “4.602” used?

Same goes for “3.409” from (1.3409) subsequently.

darshanP · March 11, 2015, 11:19am

My friend please write in bit detail. I didnt get you

Thanks

onlysimon · March 11, 2015, 6:19pm

I didn’t look at the question, but it is mentioned here…