An example of a black market is

Assume the interest rate on a current one-year bond is 3%, and the expected interest rate on the one-year bond one year from now is 6%. If the term premium on a two-year bond is 0.5%, then the interest rate on the two-year bond will be

A) 4%. B) 4.5%. C) 5%. D) 6.5%.

Regarding operating risk exposure, which of the following statements is NOT true?

a. they are more difficult to hedge than transaction risk exposures b. they are easier to forecast than translation risk exposures c. they necessitate more managerial attention and extensive analysis d. only a and b e. all of the above are true