The__________ takes into account the effects of compounding; it is used to calculate the long-term rate from the short rate and the short-term rates expected to prevail over the term to maturity of the long-term security.
A)marginal average rate
B)marginal rate
C)average marginal rate
D)geometric average

Question

Quizplus · Accepted Answer

The geometric average takes into account the effects of compounding and is used to calculate the long-term rate from the short rate and the short-term rates expected to prevail over the term to maturity of the long-term security.

The__________ Takes into Account the Effects of Compounding; It Is