Question
The current 3-year spot rate is 4% and current 5-year spot rate is 5.5%. According to the pure expectation theory of the term structure of
The current 3-year spot rate is 4% and current 5-year spot rate is 5.5%. According to the pure expectation theory of the term structure of interest rates, what is the forward rate for 1-year securities beginning four years from today?
____
A) 7.79%
B) 8.23%
C) 10.14%
D) 9.58%
The Windsor Honda offers payments of $493.19 per month for 48 months on a 2018 Civic at the complete price of $21,000 with zero down. What is the annual percentage rate (APR) of this loan?
____
A) 12%
B) 11%
C) 9%
D) 6%
Canadian law requires interest on fixed-rate mortgages to be compounded semi-annually. With an effective annual rate of 5.65%, what is the posted annual percentage rate?
____
Undetermined
5.725%
5.572%
5.257%
Hint: Rear = [1 + Rapr/m]m -1
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