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The Six Month and One-Year Rates Are 3% and 4

Question 9

Multiple Choice

The six month and one-year rates are 3% and 4% per annum with semiannual compounding.Which of the following is closest to the one-year par yield expressed with semiannual compounding?


A) 3.99%
B) 3.98%
C) 3.97%
D) 3.96%

Correct Answer:

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