Finance
posted by Anonymous .
How can one invest today at the 2year forward rate of interest?
I) By buying a 2year bond and selling a 1year bond with the same coupon
II) By buying a 1year bond and selling a 2year bond with the same coupon
III) By buying a 1year bond and then after a year reinvesting in a further 1year bond
a. I only
b. II only
c. III only
d. II and III only
Respond to this Question
Similar Questions

Finance
A 12year bond has an annual coupon rate of 9%. The coupon rate will remain fixed until the bond matures. The bond has a yield to maturity of 7%. Which of the following statements is CORRECT? 
economics
Jerry is considering buying today a new bond which makes infinite annual payments. In particular the bond pays its holder 557.3 dollars one year from the day of purchase and the annual payment increases by 129.32 dollars each year … 
Finance
A threeyear bond has 8.0% coupon rate and face value of $1000. If the yield to maturity on the bond is 10%, calculate the price of the bond assuming that the bond makes semiannual coupon interest payments. 
Finance
A fouryear TIPS bond promises a real annual coupon return of 4 percent and its face value is $1,000. While the annual inflation rate was approximately zero when the bond was first issued, the inflation rate suddenly accelerated to … 
Finance
A threeyear bond has 8.0% coupon rate and face value of $1000. If the yield to maturity on the bond is 10%, calculate the price of the bond assuming that the bond makes semiannual coupon interest payments. 
Finance
2. You are now considering adding a corporate bond to your investment portfolio. The bond was issued last year to have 10 years to maturity (so it has 9 years remaining to maturity from today) The bond has an 8% coupon, and was sold … 
Finance
4.A thirty year US treasury bond has a 4.0 percent interest rate.In contrast, a ten year Treasury bond has an interest rate of 2.5 percent. A maturity risk premium is estimated to be 0.2 percentage points for the longer maturity bond. … 
FINANCE
5. Forecasting Interest Rates Assume the current interest rate on a oneyear Treasury bond (1R1) is 5.00 percent, the current rate on a twoyear Treasury bond (1R2) is 5.75 percent, and the current rate on a threeyear Treasury bond … 
FINANCE
7. Forecasting interest rates Assume the current interest rate on a oneyear Treasury bond (1R1) is 5.50 percent, the current rate on a twoyear Treasury bond (1R2) is 5.95 percent, and the current rate on a threeyear Treasury bond … 
Corporate Finance
You have been asked to estimate the value of a 10year bond with a coupon that will be low initially but it is expected to grow later in the bondâ€™s life. The coupon is expected to be 5% of the face value of the bond (which is $ 1000) …