Question: The _ _ _ _ _ _ _ _ of the term structure of interest rates states that the interest rate on a longminusterm bond

The

________

of the term structure of interest rates states that the interest rate on a longminusterm bond will equal the average of shortminusterm interest rates that individuals expect to occur over the life of the longminusterm

bond

,

and investors have no preference for shortminusterm bonds relative to longminusterm bonds.

Question content area bottom

Part

1

.

segmented markets theory

.

expectations theory

.

liquidity premium theory

.

separable markets theory

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