Which of the Following Statements Is FALSE

question 86

Multiple Choice

Which of the following statements is FALSE?

• A)The forward rate for year 1 is the rate on an investment that starts today and is repaid in one year;it is equivalent to an investment in a one-year zero-coupon bond.
• B)The forward rate is only a good predictor of spot interest rates in the future when investors are risk adverse.
• C)We can use the law of one price to calculate the forward rate from the zero-coupon yield curve.
• D)An interest rate forward contract is a contract today that fixes the interest rate for a loan or investment in the future.

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Definitions:

Coping Strategies

Methods or techniques used by individuals to manage stress, confront challenges, or adjust to demanding situations.

Subjective

Based on or influenced by personal feelings, tastes, or opinions rather than external facts or evidence.

Primary Appraisal

An initial evaluation of whether an event is (1) irrelevant to one, (2) relevant, but not threatening, or (3) stressful.

Direct Supervisor

The immediate superior in the workplace responsible for overseeing an employee's daily activities.