sharonko0409 sharonko0409

03-01-2023
Business

Answered

Assume the Expectation Hypothesis regarding the term structure of interest rates is correct. Then, if the current one-year interest rate is 4% and the two-year interest rate is 6%, then investors are expecting the future one-year rate to be:

a. 4%.
b. 8%.
c. 6%.
d. 5%.

Answer :

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