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Which of the Following Equations Is INCORRECT

Question 50

Multiple Choice

Which of the following equations is INCORRECT?


A) Expected future spot interest rate = forward interest rate + risk premium
B) (1 + f1) × (1 + f2) × (1 + f3) × ...× (1 + fn) = (1 + YTMn) n
C) fn = Which of the following equations is INCORRECT? A) Expected future spot interest rate = forward interest rate + risk premium B) (1 + f1) × (1 + f2) × (1 + f3) × ...× (1 + fn) = (1 + YTMn) n C) fn = - 1 D) (1 + YTMn) n = (1 + YTMn - 1) n - 1(1 + fn) - 1
D) (1 + YTMn) n = (1 + YTMn - 1) n - 1(1 + fn)

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