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    Fixed Income Securities
  4. Exam
    Exam 5: Interest Rate Derivatives: Forwards and Swaps
  5. Question
    You Notice That Forward Rates Are Below the Spot Rate
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You Notice That Forward Rates Are Below the Spot Rate

Question 4

Question 4

Short Answer

You notice that forward rates are below the spot rate. What can you say about the yield curve?

Correct Answer:

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It must be downward ...

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