The current market interest rate for two-year maturity bond is 10%.The forward rate for a one year investment starting in one year from now is 8%.According to the expectations theory of term structure,the current one year maturity market interest rate is:
A)smaller than 8%.
B)larger than 10%.
C)equal to 9%.
D)equal to 8%.

Question

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The Answer of The current market interest rate for two-year maturity bond is 10%.The forward rate for a one year investment starting in one year from now is 8%.According to the expectations theory of term structure,the current one year maturity market interest rate is:
A)smaller than 8%.
B)larger than 10%.
C)equal to 9%.
D)equal to 8%.

The Current Market Interest Rate for Two-Year Maturity Bond Is