Assume the Expectations Hypothesis Regarding the Term Structure of Interest

question 57

Multiple Choice

Assume the Expectations Hypothesis regarding the term structure of interest rates is correct. If the current one-year interest rate is 3% and the expected one-year interest rate is 5%, then the current two-year interest rate should be:

• A) 3%
• B) 5%
• C) 4%
• D) 8%

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Definitions:

Behaviourally Anchored Rating Scale

A performance appraisal method that uses specific examples of behavior to evaluate employees' performance rather than subjective judgments.

Morning Bias

Morning Bias refers to the potential for decision-making or judgment to be influenced by the time of day, especially a tendency to have different cognitive processing in the morning.

Subjective Performance Measures

Evaluation metrics based on personal judgments or opinions rather than quantifiable data, often used in performance reviews.

Frame-of-Reference Training

Training designed to standardize the evaluation criteria and rating scales used by evaluators, typically in the context of performance appraisal.