The Interest Rate on a Two-Year Security Will Continue to Adjust

question 289

Multiple Choice

The interest rate on a two-year security will continue to adjust until it is equal to

• A) half the interest rate on a one-year security.
• B) twice the interest rate on a one-year security.
• C) an average of the current one-year rate and the expected one-year rate for next year.
• D) the sum of the current one-year rate and the expected one-year rate for next year.

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Definitions:

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The act of moving through water by using the limbs.

Boating

The recreational practice or occupation of traveling by boat, especially on lakes, rivers, or the sea.

Disjunctive Syllogism

A form of reasoning wherein from two statements, one necessarily follows as a conclusion if the other is ruled out.

Unstated Premise

An implicit assumption or premise that is not explicitly mentioned but is required for an argument to hold.