The expectations theory of the yield curve says that the rate of return that investors earn can differ depending on the maturities of securities that investors hold.

Question

Quizplus · Accepted Answer

The expectations theory of the yield curve posits that long-term interest rates are a predictor of future short-term interest rates, implying that the yield curve reflects market expectations for future interest rates, rather than differing rates of return based on security maturities.

The Expectations Theory of the Yield Curve Says That the Rate