The Implication of the Expectations Theory That Expected Returns for a Holding

question 72

Multiple Choice

The implication of the expectations theory that expected returns for a holding period must be the same for bonds of different maturities depends on the assumption that

• A)yield curves usually slope upward.
• B)yield curves usually slope downward.
• C)instruments with different maturities are perfect substitutes.
• D)savers are usually risk averse.

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