What Theory Believes Forward Rates Equals the Market Consensus of What

question 41

Multiple Choice

What theory believes forward rates equals the market consensus of what the future short interest rate will be?

• A) Liquidity preference theory
• B) Expectations theory
• C) Market segmentation theory
• D) Forward rate theory
• E) Short rate theory

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Definitions:

Private Health Insurance

Health insurance plans provided by private entities rather than the government, offering coverage for health care expenses to individuals and families.

Elective Surgical Procedure

A non-emergency surgery chosen by the patient, often for improvement rather than necessity.

Equilibrium Price

Equilibrium Price is the market price at which the quantity of goods supplied is equal to the quantity of goods demanded.

Deductible

The dollar sum of (for example, health care) costs that an insured individual must pay before the insurer begins to pay.