True/False
If a bank is asked to quote a rate on a one-year loan one year from today and the current interest rate on a one-year loan is 7 percent and a two-year loan is 8 percent, it should quote 9 percent.
A one-year loan one year from today: [(1.08)^2/(1.07)] - 1 = 0.09 = 9%.
Correct Answer:
Verified
Correct Answer:
Verified
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