Hi Moffat
– In (a) i didn't understand working of interpolating 4 months forward rate
Ask the Tutor ACCA AFM
Polytot *June 04*
7y ago#1The difference between the 3 months and the 12 months rate is the difference for 9 months.
So to get the 4 month rate (which is 1 month more than 3 month) you take the 3 months rate and adjust by 1/9 of the difference between the 3 month and 12 month rates.
Sign in to reply to this topic.