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10. The expectations theory of the term structure of interest rates states that: A 10 year ahead 1 year forward rates reflect spot rates on

10. The expectations theory of the term structure of interest rates states that:

A

10 year ahead 1 year forward rates reflect spot rates on 10 and 1 year bonds today.

B

10 year ahead 1 year forward rates reflect spot rates on 10 and 11 year bonds today.

C

None of the options listed.

D

10 year ahead 1 year forward rates reflect spot rates on 20 year bonds 10 years ago.

E

10 year ahead 1 year forward rates reflect spot rates on 10 and 9 year bonds today.

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