What Is the One Year Interest Rate One Year from Now

question 89

Multiple Choice

What is the one year interest rate one year from now if the current one-year interest rate is 2.55 percent and the two-year interest rate is 3.15 percent? Assume the rates are effective annual rates.

• A) 3.62 percent
• B) 3.67 percent
• C) 3.71 percent
• D) 3.75 percent
• E) 3.88 percent

---

Definitions:

Profit And Loss Statement

A financial statement that summarizes the revenues, costs, and expenses incurred during a specific period, reflecting the company's profit or loss.

Break-Even Point

The point at which total costs equal total revenues, indicating that a business is neither making a profit nor incurring a loss.

Sales Mix

The combination of different products or services that a company sells, impacting its overall profitability and performance.

Income Tax Rate

The percentage at which an individual or corporation is taxed on their income.