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:

Social Psychologists

Researchers who study how individuals think, feel, and behave in social contexts.

Dramatic Results

Outcomes that are strikingly significant or unexpected, often implying a substantial change or effect.

Just-World Hypothesis

The cognitive bias that assumes that actions always yield morally fair and fitting consequences, essentially that the world is inherently just.

Dispositional Attribution

A psychological concept where a person attributes someone's behavior to their character or personality rather than external factors.