The pure expectations theory, or the expectations hypothesis, asserts that long-term interest rates can be used to estimate future short-term interest rates. A. trueB. false

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Business

Aliana Archer

19 May, 04:45

The pure expectations theory, or the expectations hypothesis, asserts that long-term interest rates can be used to estimate future short-term interest rates. A. trueB. false

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Answers (1)

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Matias Benjamin · Answer 1

The answer is True

Explanation:

"The pure expectations theory, or the expectations hypothesis, asserts that long-term interest rates can be used to estimate future short-term interest rates" is true statement.

The expectation theory asserts that a one - year bond is purchased today will have the same yield and effect as the one - year bond purchased after five years. Both long term and short terms estimates are similar to each other.