The Spot Rate for Year 1 Is 7

question 20

Multiple Choice

The spot rate for year 1 is 7.5% and the forward rate for year one to two is 8%. The two-year discount factor is

• A) .845.
• B) .861.
• C) .852.
• D) .888.

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Definitions:

Ingroup Bias

The tendency to favor and extend loyalty to members of one's own group over those from different groups.

Outgroup Derogation

A psychological phenomenon where people tend to view and judge members of a group to which they do not belong less favorably than their own group (ingroup).

Self-Serving Attributions

A cognitive bias where individuals attribute their successes to internal or personal factors while attributing failures to external or situational factors.

Implicit Prejudice

Negative attitudes or affective reactions associated with an outgroup, for which the individual has little or no conscious awareness and which can be automatically activated in intergroup encounters.