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NYC NYC
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8 years ago
Assume the current one-year interest rate on a bond is 3%, and the one-year expected rate a year from now is 7%. According to the expectations theory of the term structure of interest rates, the two-year interest rate is:
A) 10%.
B) 5%.
C) 4%.
D) 6%.
Textbook 
Principles of Macroeconomics

Principles of Macroeconomics


Edition: 11th
Authors:
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JesslynJesslyn
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NYC Author
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#2
8 years ago
Good answer, thanks.
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