You are considering between two loans. Assume everything between these two loans is the same except for the interest rate. Loan A offers 5.5% compounded weekly. Loan B offers 5.64% compounded semiannually. Which loan is better and why?

		Loan A because the actual rate is 5.65% is lower than Loan Bs actual rate.
		Loan A because 5.5% is lower than Loan Bs 5.64%.
		Loan B because the actual rate is 5.72% is higher than Loan As actual rate.
		Loan B because 5.64% is higher than Loan As 5.5%.
		None of the above.

Suppose we observe the three-year Treasury security rate to be 12%, the expected one-year rate next year E(₂r₁) to be 8% and the expected one-year rate the following year E(₃r₁) to be 9%. Using the unbiased expectations theory, what is the one-year Treasury security rate?

		14.50%
		1.19%
		8.35%
		16.34%
		None of the above