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Question
Applying the expectations theory, a bank depositor chooses between purchasing a one- year CD paying 5 percent and a two-year CD paying 5.5 percent. If indifferent between the two, the depositor must expect one-year CDs one year from now to have a rate ofa. 6.5%
b. 4.5%
c. 6.0%
d. 5.0%
Answer
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Related questions
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