Question: Th e rate, interpreted to be the incremental return for extending the time-to-maturity of an investment for an additional time period, is the: A .

Th e rate, interpreted to be the incremental return for extending the time-to-maturity of an investment for an additional time period, is the:

A . add-on rate.

B . forward rate.

C . yield-to-maturity.

Th e following information relates to Questions 38 and 39 Time Period Forward Rate

“0y1y” 0.80%

“1y1y” 1.12%

“2y1y” 3.94%

“3y1y” 3.28%

“4y1y” 3.14%

All rates are annual rates stated for a periodicity of one (eff ective annual rates).

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