According to the Expectations Theory of the Term Structure of Interest,if

question 1

Multiple Choice

According to the expectations theory of the term structure of interest,if the 1-year bond rate today is 7% p.a.and the 1-year bond rate in one year's time is 9% p.a. ,what is 2-year bond rate today?

• A)6%
• B)7.5%
• C)8%
• D)10%

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Definitions:

Innovation

The act of converting a concept or innovation into a product or service that adds value or is something consumers are willing to purchase.

New Idea

An original concept, thought, or innovation that has not been previously considered or implemented.

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Innovation that creates products or services that become so widely used that they largely replace prior practices and competitors.