Which of the Following Statements Is FALSE

question 31

Multiple Choice

Which of the following statements is FALSE?

• A)In general,the expected future spot interest rate will reflect investor's preferences toward the risk of future interest rate fluctuations.
• B)If investors did not care about risk,then they would be indifferent between investing in a two-year bond and investing in a one-year bond and rolling over the money in one-year.
• C)When we refer to the one-year forward rate for year 5,we mean the rate available today on a one-year investment that begins four years from today and is repaid five years from today.
• D)In general,we can compute the forward rate for year n by comparing an investment in an n-year,zero-coupon bond to an investment in an (n + 1)year,zero-coupon bond,with the interest rate earned in the nth year being guaranteed through an interest rate forward contract.

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Definitions:

Conflict Theory

A sociological perspective that views social life as a competition and conflict between groups for limited resources.

Deviance

Behaviors or actions that violate societal norms, and which may attract social disapproval or sanction.

Power

The power to control or shape the actions of others and steer the direction of events.

Type of Deviance

Categorizations within deviant behavior that contrast with societal norms, including criminal and non-criminal acts.