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:

Psychological Sensation

The initial process of detecting and interpreting environmental stimuli through the senses.

Perception

The process of organizing, identifying, and interpreting sensory information to represent and understand the environment around us.

Selection Factor

A source of bias that may occur in research findings when participants are allowed to choose for themselves a certain treatment in a scientific study.

Research Findings

The outcomes, results, or conclusions gathered from investigations and studies conducted on specific topics.