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

question 36

Multiple Choice

If 1-year interest rates for the next three years are expected to be 1,1,and 1 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.