Question

Suppose the current term structure of interest rates, assuming annual compounding, is as follows:

s_1s
1
​
s_2s
2
​
s_3s
3
​
s_4s
4
​
s_5s
5
​
s_6s
6
​

7.0% 7.3% 7.7% 8.1% 8.4% 8.8%
What is the discount rate d(0,4)d(0,4)? (Recall that interest rates are always quoted on an annual basis unless

stated otherwise.)

Answer 1

Answer:

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