The Interest Rate on a Two-Year Security Will Continue to Adjust

question 289

Multiple Choice

The interest rate on a two-year security will continue to adjust until it is equal to

• A) half the interest rate on a one-year security.
• B) twice the interest rate on a one-year security.
• C) an average of the current one-year rate and the expected one-year rate for next year.
• D) the sum of the current one-year rate and the expected one-year rate for next year.

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Definitions:

Ossicles

The three small bones in the middle ear called the malleus, incus, and stapes, which help in transmitting sound vibrations to the inner ear.

Malleus

Bone found in the middle ear that assists in the transmission of sound to the inner ear; also called the hammer.

Tympanic Membrane

A thin membrane that separates the external ear from the middle ear and vibrates in response to sound waves; also known as the eardrum.

Oval Window

Structure of the middle ear that conducts sound from the middle ear to the inner ear.