When don was faced with the problem of fixing the faucet in his kitchen, he suddenly realized that he didn't have to hire a cost

Answer:

Explanation:

The one-year forward rate for year 2 is as follows:

(1+4.75%)(1+f)=(1+4.95%)^2    

(1+4.75%)(1+f)=1.10145025

(1+F)=1.10145025/1.0475

(1+f)=1.0515

f= 5.15%

The one-year forward rate for year 3 is calculated as:

(1+4.95%)^2 (1+f)=(1+5.25%)^3    

(1+4.95%)^2 (1+f)=1.16591345312

(1+f)=1.16591345312 /1.10145025

(1+f)=1.0585

f=5.85%

For the one-year forward rate for year 4:

(1+5.25%)^3 (1+f)=(1+5.65%)^4

(1+f)=1.0685

f= 6.85%

Response:

Clarification: