If the 4-Year Spot Rate Is 7% and the 3-Year

question 38

Multiple Choice

If the 4-year spot rate is 7% and the 3-year spot rate is 6%, what is the one-year forward rate of interest three years from now?

• A) 10.0%
• B) 6.5%
• C) 9.6%
• D) None of the above

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Definitions:

Blank Desktop Database

A new, empty database file created in database software like Microsoft Access, ready for data entry and design customization.

Custom Desktop Database

A database application tailor-made to suit specific needs, often designed for use on a single computer or within a small organization.

Personal Database

A database designed for use by a single person on a standalone computer, aimed at managing personal information or tasks.

Relational Database

A type of database that structures data as collections of tables that are related to each other through unique identifiers.