Given one-year spot rate r 1 = .050 and two-year spot rate r 2 = .054, what

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Given one-year spot rate r₁ = .050 and two-year spot rate r₂ = .054, what can you deduce about investor's expectations of future one-year interest rates?

A) Investors expect future one-year rates to be equal to current one-year rates.

B) Investors expect future one-year rates to be greater than current one-year rates.

C) No relations at all

D) Investors expect future one-year rates to be less than current one-year rates.

Related Book For answer-question

Exchange Rates and International Finance

ISBN: 978-0273786047

6th edition

Authors: Laurence Copeland

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Posted Date: Mar 19, 2024 01:34 PM

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Given one-year spot rate r 1 = .050 and two-year spot rate r 2 = .054, what

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Exchange Rates and International Finance

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