Hi everyone...

There is a problem of calculating spot rate, I have checked the older post that the same question has no answer yet. I post it now again.

A 6% six-year bond yields 12% and a 10% six-year bond yields 8%. Calculate the six-year spot rate. Assume annual coupon payments. Hint: what would be your cash flows if you bought 1.2 10% bonds?

Thanks for your help!! :)

There are several possible reasons that never got answers. We don't do homework for you. And I personally have never heard of a "spot rate." Finance isn't my specialty but I do remember most of the terms used even if I don't recall how to do it. I'm in the U.S. and it's possible that term just isn't used here.

Perhaps if you knew another term for that word, or could post the definition from your book...

Hi,

If I have spot rate for the first year 0.045 and the forward rate the next years 1.045 how to calculate the spot rate for the years two, and I have fwd rts for year 3 1.0576 how to calculate the spot for years two.

Thank you,

A