Question
Suppose the 2-year spot rate 4% and the 5-year spot rate 8%. The annual liquidity premium is 1%. According the expectation theory, what is the
Suppose the 2-year spot rate 4% and the 5-year spot rate 8%. The annual liquidity premium is 1%. According the expectation theory, what is the expected 3-year spot rate, 2 years from now?
| 11.75% | ||
| 13.75% | ||
| 7.75% | ||
| 10.75% | ||
| 9.75% |
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Corporate Finance Theory And Practice
Authors: Aswath Damodaran
2nd Edition
0471283320, 9780471283324
