What would be the best way to answer this question?
Based on the data in Exhibit 1 and the yield to maturity quoted by the dealer referenced in Module 2, what action should an analyst most likely take with regard to the Treasury bond?
EXHIBIT 1
SELECT SPOT AND FORWARD RATES
Year 1** Year 2 Year 3 Year 4** Spot Rate 0.055 0.0825 Discount Factor 0.8163 Forward Rate f(2,1) 0.0852