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    rates with continuous compounding

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    The 6-month, 12-month, 18-month, and 24-month zero rates are 3%, 3.5%, 3.75%, and 4% with semi-annual compounding.

    Q1: What are the rates with continuous compounding?

    Q2: What is the forward rate for the six-month period beginning in 18 months?

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    Solution Summary

    Rates with continuous compounding are examined.