According to the Pure Expectations Theory of the Term Structure

question 72

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
• E) C and D

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