The current long-term interest rate is a function of all of the following except
A)the current short-term rate.
B)the short-term rates expected in the future.
C)last year's long-term rate.
D)the liquidity premium.

Question

Quizplus · Accepted Answer

Last year's long-term rate is not a determinant of the current long-term interest rate. The other three factors listed (the current short-term rate, expected future short-term rates, and liquidity premium) all have an impact on the current long-term interest rate.

The Current Long-Term Interest Rate Is a Function of All