Given the Yield on a 3-Year Zero-Coupon Bond Is 7

question 22

Multiple Choice

Given the yield on a 3-year zero-coupon bond is 7.2% and forward rates of 6.1% in year 1 and 6.9% in year 2, what must be the forward rate in year 3?

• A) 8.4%
• B) 8.6%
• C) 8.1%
• D) 8.9%
• E) None of the options are correct.

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Definitions:

Functionalism

A theory in psychology that focuses on the purpose and functionality of consciousness and behavior in individuals.

Behaviourism

A school of psychology that focuses on observable behaviors and disregards mental activities.

Functionalism

A theory in psychology that considers mental life and behavior in terms of active adaptation to the person's environment.

William James

Often referred to as the father of American psychology, he was a philosopher and psychologist who was the first educator to offer a psychology course in the United States, making significant contributions to psychology, especially in the areas of education, religion, and mysticism.