Forward rates ____________ future short rates because ____________.
A) are equal to; they are both extracted from yields to maturity
B) are equal to; they are perfect forecasts
C) differ from; they are imperfect forecasts
D) differ from; forward rates are estimated from dealer quotes while future short rates are extracted from yields to maturity
Correct Answer:
Verified
Q22: Suppose that all investors expect that interest
Q23: The "break-even" interest rate for year n
Q24: The yield curve is a component of
A)the
Q25: The yield curve
A)is a graphical depiction of
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