The interest rate on a ________ security will continue to adjust until it is equal to an average of the current one-year rate and the expected one-year rate for the next year.

Question

Quizplus · Accepted Answer

A two-year security's interest rate adjusts to reflect both the current one-year rate and the expected one-year rate for the next year, aligning with the typical duration and interest rate adjustment mechanism for such securities.

The Interest Rate on a ________ Security Will Continue to Adjust