When the spot curve is downward sloping, an increase in the initiation date results in a forward curve____?

[question removed by admin] can someone help me understand this better, when we compare forward curve vs spot curve, what are we comparing, say T=3, r(3) is the stpot rate to discount a coupon 3 years from now, what is the forward rate there mean? its starting from year=3 and then how long is teh period?

I’m not at all sure what they mean by the initiation date.

Where’d you get this question?

Should be C

One year forward three years from now will be lower than one year forward two years from now, if the spot curve is sloping downward.

Initiation date is the date when the forward contract starts. pushing it forward in the future is the increase of initiation date.

The question is from a blue box in Reading 43 of the curriculum. They use the word “initiation” quite a bit during the reading, to describe a loan initiated T* years from today.

can you help understand when we compare spot rate and forward rate on a curve, what are we comparing? in terms of data point, I am confused because spot rate is the rate we use to discount one future income, while the other is a rate at future to couple years in future?

Bill’s write up on the par, spot and forward curves is probably your best best. http://financialexamhelp123.com/par-curve-spot-curve-and-forward-curve/

read it multiple times, still dont get it