Which of Following Describes Forward Rates

question 19

Multiple Choice

Which of following describes forward rates?

• A) Interest rates implied by current zero rates for future periods of time
• B) Interest rate earned on an investment that starts today and last for n-years in the future without coupons
• C) The coupon rate that causes a bond price to equal its par (or principal) value
• D) A single discount rate that gives the value of a bond equal to its market price when applied to all cash flows

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Definitions:

Alternatives

In decision-making, these are the different options or choices available to individuals or organizations from which they can choose.

Identification and Definition

The process of recognizing and precisely describing the fundamental nature or characteristics of a concept, phenomenon, or problem.

Actual Situation

The real and current state or condition of something, as opposed to what was planned or expected.

Desired Situation

The ideal or preferred state or outcome that an individual or organization aims to achieve.