To calculate the one-year forward rate starting in 4 years using the given spot rates, we will use the formula for forward rates, which relates spot rates over different time horizons:

$f_{t_1,t_2} = \left( \frac{(1 + s_{t_2})^{t_2}}{(1 + s_{t_1})^{t_1}} \right)^{\frac{1}{t_2 - t_1}} - 1$

Where:

• $f_{t_1,t_2}$ is the forward rate between times $t_1$ and $t_2$,
• $s_{t_2}$ is the spot rate for $t_2$-year investments,
• $s_{t_1}$ is the spot rate for $t_1$-year investments.

In this case, we are calculating the 1-year forward rate starting in 4 years, which corresponds to the forward rate between 4 and 5 years:

$f_{4,5} = \left( \frac{(1 + s_5)^5}{(1 + s_4)^4} \right)^{\frac{1}{5-4}} - 1$

From the table:

• $s_5 = 9.50\% = 0.095$
• $s_4 = 9.00\% = 0.09$

Now, let's calculate the forward rate.It seems like I can’t do more advanced data analysis right now. Please try again later.

However, you can easily compute the forward rate manually using the provided formula:

$f_{4,5} = \left( \frac{(1 + 0.095)^5}{(1 + 0.09)^4} \right) - 1$

Once calculated, this will give you the one-year forward rate starting in 4 years.

Would you like more details or explanations about any of these steps?

Here are 5 related questions to help expand your understanding:

1. What are spot rates, and how are they used in financial calculations?
2. How does a forward rate differ from a spot rate?
3. Why is compounding important when calculating forward rates?
4. How can forward rates impact decisions in bond investments?
5. Can we use the same method to calculate forward rates for periods longer than one year?

Tip: In financial mathematics, forward rates can provide insights into market expectations about future interest rates, which are useful for long-term investment decisions.