Suppose the Current 6 Year Rate Is 9% and the Current

question 45

Multiple Choice

Suppose the current 6 year rate is 9% and the current 5 year rate is 7%.What is the one year forward rate for five years?

• A) 19.57%
• B) 18.62%
• C) 15.80%
• D) 14.65%
• E) 12.67%

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Definitions:

Actual Cause

The direct reason or factor that produces an effect, leading to a specific outcome or event.

Reasonableness of Risk

The assessment of whether the risk of harm in a situation is justified under the circumstances.

Magnitude

The size, extent, or importance of something, often used in reference to quantitative measurements or perceived impact.

Social Utility

The overall contribution that an action or policy makes toward the good or welfare of a society.