The Wall Street Journal Reports That the Current Rate on Five-Year

question 97

Multiple Choice

The Wall Street Journal reports that the current rate on five-year Treasury bonds is 2.85 percent and on 10-year Treasury bonds is 4.35 percent. Assume that the maturity risk premium is zero. Calculate the expected rate on a five-year Treasury bond purchased five years from today, E(₅r₅) .

• A)3.60 percent
• B)5.85 percent
• C)7.20 percent
• D)8.28 percent

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Definitions:

Terms

Conditions and stipulations specified within agreements or contracts that define the rights and obligations of parties involved.

E-Invoice

An electronic invoice for goods or services that is sent online rather than through traditional physical mail.

Fuji Canada

Likely a reference to a company or organization operating in Canada associated with the Fuji brand, which could range from photographic and imaging products to other consumer goods.

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A year with 366 days, with an extra day added to February to keep the calendar year synchronized with the astronomical or season year; occurs every four years.