Which Fact About the Term Structure Is the Expectations Theory

question 34

Multiple Choice

Which fact about the term structure is the Expectations Theory unable to explain?

• A) Why interest rates on bonds with different terms to maturity tend to move together over time
• B) Why yields on short-term bonds are more volatile than yields on long-term bonds
• C) Why longer-term yields tend to be higher than shorter-term yields
• D) Why yields on short-term bonds are more volatile than yields on long-term bonds and why longer-term yields tend to be higher than shorter-term yields

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Definitions:

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The process of associating fields in a child table with fields in a parent table to maintain data integrity in a relational database.

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