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Why must the relationship between spot rates and forward rates hold? A) Because there is an assumption of arbitrage-free valuation in the market. B) Because
Why must the relationship between spot rates and forward rates hold?
A) Because there is an assumption of arbitrage-free valuation in the market.
B) Because we need a reliable yield curve to price fixed-income securities
C) Because investors require multiple methodologies to invest their savings
D) Because the law of one price does not hold in all situations
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