Problem:
The 6-month, 12-month, 18-month, and 24-month zero rates are 3%, 4%, 5%, and 6% with semiannual compounding.
Required:
Question: What is the continuous compounding forward rate for the six-month period beginning in 12 months?
a. 6.89%
b. 7.00%
c. 8.83%
d. 9.00%
Note: Be sure to show how you arrived at your answer.