Use the Table for the Question(s)below

question 21

Multiple Choice

Use the table for the question(s) below.
Consider the following zero-coupon yields on default-free securities:
-The forward rate for year 2 (the forward rate quoted today for an investment that begins in one year and matures in two years) is closest to:

• A)5.80%.
• B)5.50%.
• C)5.20%.
• D)5.65%.

---

Definitions:

Net Profit Margin Percentage

This is a financial metric that represents the percentage of revenue that remains as profit after all operating expenses, interest, taxes, and preferred stock dividends have been deducted from a company's total revenue.

Cost of Goods Sold Percentage

A ratio that compares the cost of goods sold to the total sales revenue, indicating the efficiency of production and pricing.

Asset Turnover Ratios

Ratios that capture how efficiently a company uses its assets.

Solvency Ratios

Ratios that measure a company’s ability to meet its long-term obligations.