According to the Unbiased Expectations Theory

question 9

Multiple Choice

According to the unbiased expectations theory,

• A)markets are segmented and buyers stay in their own segment.
• B)liquidity premiums are negative and time varying.
• C)the term structure will most often be upward sloping.
• D)the long-term spot rate is an average of the current and expected future short-term interest rates.
• E)forward rates are less than the expected future spot rates.

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