Question

Id	359
Number	5
Description	At time <i>t</i> = 0, Ace observes the following zero rates over three periods: </br> <table style="width:90%;text-align:center"> <tr><th class="left">Periods</th><th>Zero Rates</th></tr> <tr><td class="left">1</td><td>2.2727%</td></tr> <tr><td class="left">2</td><td>3.0323%</td></tr> <tr><td class="left">3</td><td>3.6355%</td></tr> </table> Which of the following best describes how Ace arrives at a three-period par swap rate (s<sub>3</sub>)?