According to the Expectations Theory of the Term Structure, the Equilibrium

question 33

Multiple Choice

According to the expectations theory of the term structure, the equilibrium relationship between the n-period interest rate and the n 1-year interest rates is:

• A)i (t) = (1/n)[i (t) + i (t + 1) + ... + i (t + n - 1)]. n 1 1 1
• B)Ei (t) = (1/n)[i (t) + i (t + 1) + … + i (t + n - 1)]. n 1 1 1
• C)Ei (t) = n·[i (t) + Ei (t + 1) + ... + Ei (t + n - 1)]. n 1 1 1
• D)i (t) = (1/n)[i (t) + Ei (t + 1) + ... + Ei (t + n - 1)].

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