What is the price of an interest rate caplet that provides


a. What is the 2-year forward price for a 1-year bond?

b. What is the price of a call option that expires in 2 years, giving you the right to pay $0.90 to buy a bond expiring in 1 year?

c. What is the price of an otherwise identical put?

d. What is the price of an interest rate caplet that provides an 11% (effective annual rate) cap on 1-year borrowing 2 years from now?

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Finance Basics: What is the price of an interest rate caplet that provides
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