Ho lee model - Study guides, Class notes & Summaries

READING 35 – THE TERM STRUCTURE AND INTEREST RATE DYNAMICS 1 Which forward rate cannot be computed from the one-, two-, three-, and four-year spot rates? The rate for a: A one-year loan beginning in two years. A two-year loan beginning in two years. A three-year loan beginning in two years. 1 Consider spot rates for three zero-coupon bonds: r(1) = 3%, r(2) = 4%, and r(3) = 5%. Which statement is correct? The forward rate for a one-year loan beginning in one year will be: A less than t...