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Assuming the following yield curve, what is the one year forward rate in three years? i = 2

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1. Assuming the following yield curve, what is the one year forward rate in three years? i = 2.6%, i = 2.4%, i = 2.2%, i = 2%, i = 1.8% 01 02 03 04 05 A. 1.496 B. 2.296 O C. 1.896 D. 196
   The joint test problem A. makes it possible to test market efficiency and behavioural finance at the same time B. makes it difficult to test market efficiency C. makes it difficult to test both technical and fundamental analysis D. makes it easier to test market efficiency
2. In what area have investment banks established a reputation as financial innovators? A. Bank bill issues B. Home loans C. Arbitrage activities D. Term loans
   Short-term debt securities are traded in which of the following markets? A. Retail markets B. Money markets C. Foreign exchange markets OD. Capital markets