Sembilan Co (J12)

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May 27, 2015 at 12:37 am #249371
P4
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Hello John!

Why are you calculating interest for year 1 of Yield curve but the rest are calculated with Forward rates?
May 27, 2015 at 8:29 am #249458
John Moffat
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It is not me calculating – it is the examiner 🙂

For the first year we know what the actual spot rate is (2.5%) for the later years we do not know what the actual spot rates will be, so we are using the forward rates.
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