Lsquolsquothe expected future value of an interest rate in, Finance Basics

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Lsquolsquothe expected future value of an interest rate in

‘‘The expected future value of an interest rate in a risk-neutral world is greater than it is in the real world.''

What does this statement imply about the market price of risk for (a) an interest rate and (b) a bond price.

Do you think the statement is likely to be true? Give reasons.

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Finance Basics: Lsquolsquothe expected future value of an interest rate in

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Finance Basics: Lsquolsquothe expected future value of an interest rate in

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