You Find That the Yield on a 4-Year Bond Is

question 64

Multiple Choice

You find that the yield on a 4-year bond is 9% while the yield on a 2-year bond beginning four years from now is 10%.What should be the yield on a 6-yr bond as predicted by the expectations' theory?

• A) 1.00%
• B) 9.33%
• C) 14.32%
• D) 70.80%

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Definitions:

Fraternal Twins

Twins that develop from two different eggs fertilized by two different sperm, resulting in siblings that are genetically similar but not identical.

Identical Twins

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Progressive Matrices

A type of IQ test that measures abstract reasoning, typically using patterns of shapes with a piece missing, where the participant must identify the correct piece to complete the pattern.

Stanford-Binet

An individually administered intelligence test that was first developed to assess cognitive abilities in children but is now used for all ages.