Suppose the spot rates for 1 and 2 years are s1=6.3% and s2=6.9% with annual compounding. recall that in this course interest rates are always quoted on an annual basis unless otherwise specified. what is the forward rate, f1,2 assuming annual compounding?

Since the problem assumes annual compounding, then the relationship of forward rate and spot rates is given in the equation:

f1,2 = ((s2^2 / s1) - 1)

Therefore,

f1,2 = ((1.069^2 / 1.063) - 1)

f1,2 = 0.075 = 7.5%

Forward rate is 7.5%.

answer may be d i think

due to the changes the federal reserve is making the unused reserves will impact the economy by them facing inflation. inflation is definfed as the increase in pricing of a good or service but the decline of the value of money used for purchasing those items. when the economy has a high inflation rate, they are subject to money loss and hurt on the economy.