According to the Expectations Theory of the Term Structure of Interest

question 36

Multiple Choice

According to the expectations theory of the term structure of interest rates,

• A)a short-term interest rate is equal to the average of current and expected future long-term interest rates.
• B)a short-term interest rate has no relation to long-term interest rates.
• C)a long-term interest rate is equal to the average of current and expected future short-term interest rates.
• D)the yield curve is always flat.

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