Forward Interest Rates

question 53

Multiple Choice

Forward interest rates:

• A)accurately predict future spot rates because of the law of one price.
• B)tend not to be good predictors of future spot rates.
• C)tend to be biased downward as predictors of future spot rates when the yield curve is upward sloping.
• D)tend to be biased upward as predictors of future spot rates when the yield curve is downward sloping.

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Definitions:

Insurance Company

An organization that provides financial protection and compensation for specified losses in exchange for premiums.

Patient Status

The current condition or state of a patient, including health status, and whether they are admitted, discharged, or under observation.

Eligibility for Benefits

Criteria that determine if individuals or groups qualify for certain advantages or services.

Predetermination

The act of deciding or establishing something in advance, often before relevant data or events are known.