Suppose That All Investors Expect That Interest Rates for the 4

question 9

Multiple Choice

Suppose that all investors expect that interest rates for the 4 years will be as follows: $\begin{array}{ll}\text { Year } &\text { Forward Interest Rate }\\ 0 & 4\% \text { (today) } \\1 & 5\% \\2 & 6\%\\3&7\%\end{array}$ What is the price of a 2-year maturity bond with a 10% coupon rate paid annually? (Par value = $1,000)

• A) $1,092
• B) $1,054
• C) $986
• D) $1,103
• E) None of the options are correct.

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Definitions:

Follower Role Orientation

The manner in which followers view their role and responsibilities in relation to leaders and the organization.

Organizational Outcomes

The results or consequences of an organization's actions, including its performance, employee satisfaction, and financial health.

Immediacy

Refers to the degree of directness and closeness in communication or interaction, often used to create a sense of urgency or intimacy.

Reciprocity

A social norm of responding to a positive action with another positive action, rewarding kind actions.