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i have read your previous comments on this.
my question:lets assume that the spot rates and forward rates were given as normal so there was no confusion to mere mortals.
the fact he asked for the minimum interest … was that fair?
am just trying IF there is any take-away from this part of the question.
regards
Firstly, this is not really a very good question to practice on because it was set by the previous examiner. The reason he is no longer the examiner is because some of his questions were awful and this is one of them.
It wasn’t really fair because the actual forward rate should be already determined by the actual interest rates, and so the two should equal each other anyway.
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