Problem:
Assume that the 6-month, 12-month, 18 month, and 24-month zero rates are 4%, 4.5%, 4.75%, and 5% with semiannual compounding.
Required:
Question 1: What are the rates with continuous compounding respectively?
Question 2: What is the forward rate (expressed with continuous compounding) for the 6-month period begining in 18 months.
Note: Provide support for rationale.