Which of the Following Statements Is FALSE

question 31

Multiple Choice

Which of the following statements is FALSE?

• A)In general,the expected future spot interest rate will reflect investor's preferences toward the risk of future interest rate fluctuations.
• B)If investors did not care about risk,then they would be indifferent between investing in a two-year bond and investing in a one-year bond and rolling over the money in one-year.
• C)When we refer to the one-year forward rate for year 5,we mean the rate available today on a one-year investment that begins four years from today and is repaid five years from today.
• D)In general,we can compute the forward rate for year n by comparing an investment in an n-year,zero-coupon bond to an investment in an (n + 1)year,zero-coupon bond,with the interest rate earned in the nth year being guaranteed through an interest rate forward contract.

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Definitions:

Physical Disorders

Health conditions that affect the body's structure or function, often requiring medical intervention.

Abnormality

A deviation from the norm or standard, often referring to irregular behaviors, patterns, or processes that may suggest a psychological condition.

Personal Distress

An emotional response to witnessing the sufferings of others, leading to feelings of discomfort and anxiety.

Anxiety Attacks

Sudden and intense periods of fear or discomfort, often with physical symptoms like rapid heartbeat and sweating.