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

question 79

Multiple Choice

If 1-year interest rates for the next three years are expected to be 4,2,and 3 percent,and the 3-year term premium is 1 percent,than the 3-year bond rate will be

• A) 1 percent.
• B) 2 percent.
• C) 3 percent.
• D) 4 percent.

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Definitions:

Total Assets Ratio

A financial metric comparing total assets to another key financial figure, often used to assess a company's size, efficiency, or leverage.

Accounts Payable

Money owed by a business to its suppliers or creditors for goods and services purchased on credit, typically due within a short-term period.

Net Working Capital Turnover

A ratio indicating how effectively a company generates sales for every unit of working capital used over a period.

Accounts Payable

The amount of money that a company owes to its creditors or suppliers for goods and services received but not yet paid for.