The Term Structure of Interest Rates States That

question 58

Multiple Choice

The term structure of interest rates states that

• A) terms of the loan have major effects on the interest rate.
• B) the long term interest rate is the geometric mean of the series of short term rates covering the same period.
• C) the long term rate would be higher than the individual short term rates in a rising interest rate environment.
• D) Both B and C are correct.

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