According to the Pure Expectations Theory of the Term Structure

question 52

Multiple Choice

According to the pure expectations theory of the term structure of interest rates, the ____ the difference between the implied one-year forward rate and today's one-year interest rate, the ____ is the expected change in the one-year interest rate.

• A)greater; less
• B)less; greater
• C)greater; greater
• D)less; less

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Definitions:

Child Care Allowance

Financial support provided by an employer or government to help offset the costs of child care for employees or citizens.

Pensions and Savings Plans

Retirement benefit plans sponsored by employers to provide employees with financial security in their retirement years.

Legally Required Benefit

Employee benefits that employers are mandated to provide by law, such as social security, workers' compensation, and unemployment insurance.

Family Medical Leave

A policy allowing employees to take an extended leave of absence from work, for family or medical reasons, with the assurance of job security.