A Recent Edition of the Wall Street Journal Reported Interest

question 28

Multiple Choice

A recent edition of The Wall Street Journal reported interest rates of 3.10 percent, 3.50 percent, 3.75 percent, and 3.95 percent for three-year, four-year, five-year, and six-year Treasury security yields, respectively, According to the unbiased expectation theory of the term structure of interest rates, what are the expected one-year rates for year 6?

• A) 3.575 percent
• B) 3.95 percent
• C) 4.96 percent
• D) 5.33 percent

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Definitions:

Structuralism

An early school of psychology that sought to analyze the adult mind in terms of the simplest definable components and then to find the way in which these components fit together in complex forms.

Basic Elements

Fundamental components or aspects that make up a system, structure, or principle.

Psychology

Psychology is the scientific study of the mind and behavior, encompassing both conscious and unconscious experiences as well as thought and emotion.

Trained Introspection

A method in psychology where individuals are trained to carefully observe and report their own thoughts, feelings, and sensations.