According to the Expectations Theory, long-term rates must:
A) equal the present value of the expected cashflows from the bonds involved.
B) equal the geometric mean of a series of expected future short-term rates.
C) always be higher than short-term rates.
D) be an average of the present and future short-term rates.

Question

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The Answer of According to the Expectations Theory, long-term rates must:
A) equal the present value of the expected cashflows from the bonds involved.
B) equal the geometric mean of a series of expected future short-term rates.
C) always be higher than short-term rates.
D) be an average of the present and future short-term rates.

According to the Expectations Theory, Long-Term Rates Must