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 discount rate d(0,2)? Please submit your answer rounded to three decimal places. So, for example, if your answer is 0:4567 then you should submit an answer of 0:457.
82+109=191
125-93=32
163/15=10.9
403
x 585
————
2055
3286
+2055
——————
240,415
Hope that helps!
Answer: Geometric sequences and exponential functions are very closely related. As a result, geometric sequences and exponential functions look very similar. The fundamental difference between the two concepts is that a geometric sequence is discrete while an exponential function is continuous.
