Calculation of Forward rate from Bond price

s.roy
Good Student
Posts: 19
Joined: Wed Jul 26, 2017 7:32 am

Calculation of Forward rate from Bond price

Postby s.roy » Wed Sep 27, 2017 7:54 am

1. If prices of two bonds are given in period T1 and period T 2. Then how to calculate Forward rate from this. Please give me the exact formula. So that based on this formula all relating problem can be solved.

edupristine
Finance Junkie
Posts: 822
Joined: Wed Apr 09, 2014 6:28 am

Re: Calculation of Forward rate from Bond price

Postby edupristine » Fri Oct 06, 2017 8:49 am

Following formula can be used to compute Forward rate.

= (R2 T2 - R1 T 1 ) / (T2 - T1)


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