11-97 What Rate Is Expected on a One-Year B?rated Corporate

question 54

Multiple Choice

11-97 What rate is expected on a one-year B?rated corporate bond in one year? (Hint: Use the implied forward rate.)

• A)10.0 percent.
• B)9.09 percent.
• C)14.15 percent.
• D)12.0 percent.
• E)17.0 percent.

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Definitions:

Collect Like Terms

The method in algebra which involves merging terms that possess identical variables elevated to the same exponent.

Operation Indicated

The execution of a computational or algebraic process as prescribed by mathematical or operational signs.

Collect Like Terms

A mathematical process of combining terms in an algebraic expression that have the same variables raised to the same power.

Operation Indicated

Refers to carrying out the arithmetic or mathematical operation that a particular problem or equation specifies.