Please explain why this statement is (False). The unbiased expectations hypothesis of the term structure posits that long-term interest rates are unrelated to expected future short-term rates.
Please explain why this statement is (False). The unbiased expectations hypothesis of the term structure posits that long-term interest rates are unrelated to expected future short-term rates.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Please explain why this statement is (False).
The unbiased expectations hypothesis of the term structure posits that long-term interest rates are unrelated to expected future short-term rates.
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Step 1
The unbiased expectations hypothesis expresses that the forward loan costs are unprejudiced indicators of resulting spot loan costs. While a few papers recognize the various types of the Assumptions Speculation,' most have not recognized the Neighborhood and Impartial Speculations.
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