Which of These Is the Expected or "Implied" Rate on a Short-Term

question 61

Multiple Choice

Which of these is the expected or "implied" rate on a short-term security that will originate at some point in the future?

• A)Current yield
• B)Forward rate
• C)Spot rate
• D)Yield to maturity

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Definitions:

Transactions

Agreements or exchanges between parties, often involving the sale, purchase, or trade of goods and services.

Joint Stock Company

A type of business entity owned by shareholders where the stock can be bought and sold on stock exchanges.

Perpetual Existence

A corporate structure characteristic where a company continues indefinitely, unless dissolved, regardless of changes in ownership or management.

Implied Duration

Estimated time that represents how long it takes for the price of a fixed-income investment to be repaid by its internal cash flows.