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    Spot Rates Calculated

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    How would I calculate the 1 yr forward rates over the next 3 years for spot rates of Yr 1 .050
    Yr 2 .054
    Yr 3 .059
    Yr 4 .066

    I just need the formulas, not the answers.

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    Solution Preview

    You can use Linear Regression in Excel for this calculation. Or use the formulae in the attachment.

    NOTE: x is year numbers 1, 2, 3, 4, 5 and y is spot rates for these years successively.

    Linear ...

    Solution Summary

    The expert calculates the 1yr forward rates over the next 3 years for spot rates.