What Information Is Needed to Compute Odds

question 13

Multiple Choice

What information is needed to compute odds?

• A)Sample mean
• B)Sample proportion
• C)Sample variance
• D)Sample median

---

Definitions:

Forward Interest Rate

A future rate agreed upon for a financial transaction or investment that will be carried out at a later date.

Term Structure

The relationship between interest rates (or bond yields) and different terms (or maturities), typically depicted in a yield curve.

Expectations Theory

A theory suggesting that long-term interest rates reflect the market's expectation for future short-term rates.

Liquidity Preference Theory

Theory that investors demand a risk premium on long-term bonds. Implies that the forward rate generally will exceed the expected future interest rate.