Forward Interest Rates

question 98

Multiple Choice

Forward interest rates:

• A)accurately predict future spots rates because of the law of one price.
• B)tend not to be good predictors of future spot rates.
• C)tend to be biased downward as predictors of future spot rates when the yield curve is upward sloping.
• D)tend to be biased upward as predictors of future spot rates when the yield curve is downward sloping.

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Definitions:

Bridging

The process of building connections or finding compromise solutions between divergent points of view or conflictual situations.

Expanding the Pie

A strategy in negotiations aimed at increasing the resources available, making it possible for all parties to achieve more favorable outcomes.

Common Goal

A shared objective or outcome that all parties involved in a negotiation or project are trying to achieve.

Shared Result

An outcome of a collaborative effort that benefits all involved parties.