The Current Market Interest Rate for One Year Maturity Bond

question 53

Multiple Choice

The current market interest rate for one year maturity bond is 10%.The forward rate for a one year investment starting in one year from now is 8%.According to the expectations theory of term structure,the current two-year maturity market interest rate is:

• A)smaller than 8%.
• B)larger than 10%
• C)between 8% and 10%.
• D)8%.

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Definitions:

Peer Groups

Sets of individuals of approximately the same age, social status, and interests who interact with each other.

Self-Socialization

Involves choosing socialization influences from the wide variety of mass media offerings.

Jeffrey Jensen Arnett

A psychologist known for his theory on emerging adulthood, a stage of development between adolescence and full-fledged adulthood.

Socialization Influences

The various ways through which individuals learn and internalize societal norms, values, and roles, including family, education, media, and peer groups.