Which of the Following Equations Is INCORRECT

question 59

Multiple Choice

Which of the following equations is INCORRECT?

• A) Expected future spot interest rate = forward interest rate + risk premium
• B) (1 + f₁) × (1 + f₂) × (1 + f₃) × ... × (1 + f_n) = (1 + YTM_n)ⁿ
• C) f_n = - 1
• D) (1 + YTM_n)ⁿ = (1 + YTM_{n - 1})^{n - 1}(1 + f_n)

---

Definitions:

Benzophenone

An organic compound with the formula (C6H5)2CO, commonly used in organic chemistry as a photoinitiator.

Diethyl Ether

An organic compound commonly used as a solvent, characterized by an oxygen atom connecting two ethyl groups.

1-Butanol

A primary alcohol with the chemical formula C4H9OH, characterized by a four-carbon straight chain terminating in a hydroxyl group.

PhCHO

Formaldehyde with a phenyl group, also known as benzaldehyde, a common organic compound used in synthesis.