If 1-Year Interest Rates for the Next Five Years Are

question 104

Multiple Choice

If 1-year interest rates for the next five years are expected to be 4,2,5,4,and 5 percent,and the 5-year term premium is 1 percent,than the 5-year bond rate will be

• A)2 percent.
• B)3 percent.
• C)4 percent.
• D)5 percent.

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Definitions:

Requirements

Mandates or criteria set forth for achieving or maintaining a specific standard or fulfilling a specific condition.

Cover

In commercial transactions, the act of purchasing substitute goods when a seller fails to fulfill a contract.

Incidental Damages

Additional minor costs that a party incurs when the other party fails to fulfill a contract.

Unpaid Seller

A seller who has not received payment for goods supplied.