Which of the Following Equations Is INCORRECT

question 21

Multiple Choice

Which of the following equations is INCORRECT?

• A)Expected future spot interest rate = forward interest rate + risk premium
• B)(1 + f₁)× (1 + f₂)× (1 + f₃)× ...× (1 + f_n)= (1 + YTM_n)ⁿ
• C)f_n = - 1
• D)(1 + YTM_n)ⁿ = (1 + YTM_{n - 1})^{n - 1}(1 + f_n)

---

Definitions:

Conscious Reasoning

The deliberate use of logic and rational thinking in making decisions or solving problems, typically involving awareness and reflective thought.

Intuition

The skill to comprehend or perceive something right away, bypassing the process of conscious deliberation.

Problem

is a situation, question, or issue that is difficult to understand or deal with, often requiring analysis and solution.

Opportunity

A situation or condition that places individuals in a favorable position to exploit resources or capabilities for achieving specific goals or improvement.