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It is Accept OR Reject? Assume that the 1-year interest rate is 7% and the 2-year interest rate is 8% per year. You approach a
It is Accept OR Reject?
Assume that the 1-year interest rate is 7% and the 2-year interest rate is 8% per year. You approach a bank and ask at what rate the bank will promise to make a 1-year loan in 12 months' time. The bank offers to make a forward commitment to lend to you at 10%. Would you accept the offer? You should (Click to select the offer. Assume that the 1-year interest rate is 7% and the 2-year interest rate is 8% per year. You approach a bank and ask at what rate the bank will promise to make a 1-year loan in 12 months' time. The bank offers to make a forward commitment to lend to you at 10%. Would you accept the offer? You should (Click to select the offerStep by Step Solution
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