n NISM Certifications
XIII NISM Series XIII
Medium

Assume that the 6-month rate is 5.5% and the 1-year rate is 7%. From the options below, what should be the 5-year rate so that the shape of the term structure would be Normal?

Practice question from NISM Series XIII for SIF - Mock Test 5 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    6.5%

  2. B

    7%

  3. 8.5%

    Correct answer

  4. D

    4%

A full explanation for this question is being written. In the meantime, the correct answer is highlighted above.

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