Consider spot rates for three zero-coupon bonds:r(1)=3%,r(2)=4%,andr(3)=5%.Which statement is correct? The forward rate for a one-year loan beginning in one year will be:
A. less than the forward rate for a one-year loan beginning in two-years.
B. greater than the forward rate for a two-year loan beginning in one-year.
C. greater than the forward rate for a one-year loan beginning in two-years.
Ans: A. less than the forward rate for a one-year loan beginning in two-years.
Business
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Fill in the blank with correct word.
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Because convertibility is a desirable feature for investors, convertible bonds tend to offer a higher return than nonconvertible bonds
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