You Note the Following Yield Curve in the Wall Street

question 36

Multiple Choice

You note the following yield curve in The Wall Street Journal. According to the unbiased expectations hypothesis, what is the one-year forward rate for the period beginning one year from today, ₂f₁?
$$\begin{array}{l}\begin{array} { l l } \text {Maturity }&\text {Yield}\\\text {One day }&3.00\%\\\text {One year }&5.00\\\text {Two years }&6.25\\\text {three years }&8.00\\\end{array}\end{array}$$

• A) 1.01 percent
• B) 1.19 percent
• C) 5.625 percent
• D) 7.51 percent

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Service Firms

Businesses that provide intangible products or services to consumers or other businesses.

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Companies that use labor, equipment, and raw materials to produce finished goods on a large scale.

Work in Process Inventory

Goods partially completed during the manufacturing process, not yet ready for sale.

Materials Ledger Cards

Records used to track the quantities and costs of materials on hand in inventory through receipts, issuances, and balances.