Which of the Following Statements Is FALSE

question 86

Multiple Choice

Which of the following statements is FALSE?

• A)The forward rate for year 1 is the rate on an investment that starts today and is repaid in one year;it is equivalent to an investment in a one-year zero-coupon bond.
• B)The forward rate is only a good predictor of spot interest rates in the future when investors are risk adverse.
• C)We can use the law of one price to calculate the forward rate from the zero-coupon yield curve.
• D)An interest rate forward contract is a contract today that fixes the interest rate for a loan or investment in the future.

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Definitions:

Onlooker Behavior

Refers to a social development stage where an individual observes others engaging in an activity but does not join in.

Parallel Play

A developmental stage in early childhood where children play next to each other without interacting or coordinating their activities.

Nonsocial Play

A type of play where children play alone or with objects, without significant interaction with others.

Associative Play

A stage of play where children play together but not cooperatively, often observed in children aged 3 to 4 years.