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- When calculating present value, the the interest rate, the smaller the present value amount. smaller largerWhat is expectations theory of the term structure of interest rates? Group of answer choices a. Long term interest is equal to average short-term interest rates. b. Average rates is the term of structure of interest rates. c. Short-term interest is equal to long-term interest rates. d. Long term interest is the sum of all short-term interest rates.The ‘Yield Curve’, also known as the ‘Term Structure of Interest Rates’, can take several different shapes. Explain the term ‘Yield curve’.
- What is the difference between a coupon rate, yield to maturity, and current yield? What is Fisher effect and the relationship between real and nominal interest rates?Explain risk-free interest rate (the nominal short-term rate)Which are the two computational schemes for calculating this earned interest yield?
- Explain how a yield curve is constructed and what its shape reveals about interest rates.Distinguish between the initial rate of interest and the expected yield on an ARM. What is the general relationship between the two? How do they generally reflect ARM terms?The coupon interest rate: O Is larger than the stated interest rate O Is the same as the market interest rate O Is the same as the stated interest rate O Is the same as the effective interest rate