The Interest Rate on a Two-Year Security Will Continue to Adjust

Multiple Choice

The interest rate on a two-year security will continue to adjust until it is equal to

A) half the interest rate on a one-year security.
B) twice the interest rate on a one-year security.
C) an average of the current one-year rate and the expected one-year rate for next year.
D) the sum of the current one-year rate and the expected one-year rate for next year.