A commercial bank made a five-year term loan at 13 percent, Financial Management

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A commercial bank made a five-year term loan at 13 percent

A commercial bank made a five-year term loan at 13 percent. The bank's economics department forecasts that one and three years in the future, the two-year interest rate will be 12 percent and 14 percent, respectively. The current one-year rate is 7 percent. Given that the bank's forecast is reliable, has the bank set the five-year rate correctly?

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Financial Management: A commercial bank made a five-year term loan at 13 percent

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Financial Management: A commercial bank made a five-year term loan at 13 percent

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