Multiple Choice
A two-year interest rate is 7% and a one-year forward rate one year from now is 8%. According to the expectations theory, what is the current one-year rate?
A) 6.0%
B) 6.5%
C) 7.0%
D) 8.0%
E) 9.0%
Correct Answer:
Verified
Correct Answer:
Verified
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