Original Spot Rates:
1 year – 1%; 2 year – 2%
The 1-year forward rate starting one year from today is 3.0099%. If you purchase a 2-year par bond, hold it for 1 year, and the yield curve experiences a +50 bp parallel shift.
What is the realized yield?
Juhi MaruPro
Realized yield with parallel shift in the yield curve
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Realized yield after one year or 2 years?
realized yield after 1 year
Is answer 0.5121%?
The answer is 2.47%. I don’t have the calculation
Even I am getting the same answer.
Can you show the calculation?