Is the forward rate an unbiased estimate of the future spot
Question: 1. Is the forward rate an unbiased estimate of the future spot rate of interest? Explain your answer.
2. Why are the actual and pseudo-probabilities different? Do the actual probabilities influence the caplet's value? Explain your answer.
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question given the caplet solution in problem compute the caplets deltaproblem suppose that the time 0 simple forward
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