What Interest Rate Is Expected on a One-Year B-Rated Corporate

question 35

Multiple Choice

What interest rate is expected on a one-year B-rated corporate bond in one year? (Hint: Use the implied forward rate.)

• A)10.0 percent.
• B)9.09 percent.
• C)14.15 percent.
• D)12.0 percent.
• E)17.0 percent. [Refer to: 10-107]

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