Main Profile

At A Glance

Expectation Theories of Yield Term Structures

Pure expectations says the long spot rates predict future spot rates (i.e., the forward rate is an unbiased predictor of future spot rates). "Liquidity Preference" adds a RISK PREMIUM: investors in longer maturities demand compensation for maturity risk (e.g., uncertainty, greater duration/interest rate risk). "Preferred habitat" adds the technical factor of supply/demand.
Length: 08:07

Contact

Questions about Expectation Theories of Yield Term Structures

Want more info about Expectation Theories of Yield Term Structures? Get free advice from education experts and Noodle community members.

  • Answer

Ask a New Question