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Author Question: According to expectations theory if the 1 year interest is 2.5% this year and expected to be 3.5% ... (Read 12 times)

allywil32

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Question 1

A primary goal of Federal Reserve actions with respect to interest rates is to
◦ ensure the availability of low-interest loans.
◦ reduce volatility in financial markets.
◦ keep stock prices high.
◦ control inflation.

Question 2

According to expectations theory if the 1 year interest is 2.5% this year and expected to be 3.5% next year, the 2 year interest rate should be approximately
◦ 8.75%.
◦ 6%.
◦ 3.5%.
◦ 3%.


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Marked as best answer by allywil32 on Mar 29, 2022

Sha

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allywil32

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Reply 2 on: Mar 29, 2022
YES! Correct, THANKS for helping me on my review


bbburns21

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Reply 3 on: Yesterday
Great answer, keep it coming :)

 

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