alpana

Please provide some of the different Implications in a Expectation Theory of Interest rate.

I was wondering what are the Expectation Theory of Interest Rate Implications.
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kaijiang
"Implications: - Long-term rate will be more than short-term rate if investors expect future short-term spot rates to be higher than the current short-term rate. - Long-term rate will be lower than short-term rate if investors expect future short-term spot rates to fall below the current short-term rate. - Long-term rate is equal to short-term rate if no change is expected between future short-term spot rates and current rate. Source: http://in.docsity.com/en-docs/Interest_Rate_-_Security_Analysis_and_Portfolio_Management_-_Solved_Quiz_"
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