The "Break-Even" Interest Rate for Year N That Equates the Return

question 40

Multiple Choice

The "break-even" interest rate for year n that equates the return on an n-period zero-coupon bond to that of an n-1-period zero-coupon bond rolled over into a one-year bond in year n is defined as

• A) the forward rate.
• B) the short rate.
• C) the yield to maturity.
• D) the discount rate.
• E) None of these.

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Definitions:

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