A Forward Rate Prevailing from Period Three Through to Period

question 46

Multiple Choice

A forward rate prevailing from period three through to period four can be:
I. readily observed in the market place
II. extracted from spot interest rate with 3 and 4 years to maturity
III. extracted from 1 and 2 year spot interest rates

• A) I only
• B) II only
• C) III only
• D) I and III only

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Definitions:

Capacity

The maximum amount something can contain or the ability to do something.

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The shortest-term element of memory, which acts as a buffer for stimuli received through the senses and is capable of holding information for a very short period of time.

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