For This Question,assume That One-Year and Two-Year Bonds Have the Same

question 40

Multiple Choice

For this question,assume that one-year and two-year bonds have the same risk; therefore,you can ignore risk here.Assuming that there is arbitrage between one-year bonds and two-year bonds,we know that the expected rate of return on two-year bonds

• A)will equal the expected rate of return from holding a one-year bond for one year.
• B)will equal the expected rate of return from holding a one-year bond for two years.
• C)will be larger than the expected rate of return from holding a one-year bond for one year.
• D)will be smaller than the expected rate of return from holding a one-year bond for one year.
• E) will be exactly half the rate of return on one-year bonds.

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Definitions:

Society Changes

Refers to the evolution and transformation of social structures, norms, values, and behaviors over time in a community or society.

Power in Society

The ability to influence or outright control the behavior of people and the course of events within a community or society at large.

Industrial Societies

Societies characterized by a reliance on mechanized labor to create goods, resulting in a shift from agricultural economies to manufacturing economies.

Death Rates

The number of deaths occurring in a particular population, location, or period, usually expressed per thousand or hundred thousand.