Forward yield curve

CFA Level I
#1

Which forward rates do you use for calculating the forward yield curve? 1y1y, 1y2y, 1y3y Or 1y1y, 2y1y, 3y1y

#2

Not too sure though, but from intuition, 1y1y, 2y1y and 3y1y seems logical…

Because you are looking at 1 year forward rate one year from now, one year forward rate two years from now, and one year forward rate three years from now, so that measure variation in the yield over time and should fit the bill…

#3

I don’t remember the silly new notation that CFA Institute uses (and I’m too lazy to look it up now), but you use 1-period forward rates: the 1-year rate starting 1 year from today, the 1-year rate starting two years from today, and so on.

#4

Thank you olajideanuoluwa001 and S2000magician.

#5

My pleasure.