YouTube T3-11: Forward rates are implied by zero rates

Nicole Seaman

Director of FRM Operations
Staff member
Forward rates link two zero (aka, spot) rates by ensuring your expected return is the same between two choices: (1) invest at the longer-term spot rate versus (2) invest at the shorter-term spot rate and "roll over" into the implied forward rate. This is an implied forward rate that ignores other factors such as liquidity preference.

David's XLS is here:

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New Member
Hi I am really having trouble calculating the rate at the end with calculating the discrete rate. i get .052 Could someone please help me with the calculations? thanks