If 1-Year Interest Rates for the Next Five Years Are

question 104

Multiple Choice

If 1-year interest rates for the next five years are expected to be 4,2,5,4,and 5 percent,and the 5-year term premium is 1 percent,than the 5-year bond rate will be

• A)2 percent.
• B)3 percent.
• C)4 percent.
• D)5 percent.

---

Definitions:

Smelted

The process of extracting a metal from its ore by heating and melting, often involving a chemical reduction reaction.

Carload

A shipping term used to indicate the minimum quantity of cargo necessary for goods to be shipped at a carload rate, typically pertaining to rail transport.

Smelted

The process of extracting a metal from its ore by heating and melting.

Carload

A shipping term denoting the minimum quantity of cargo required for a shipper to qualify for a reduced rate.