2. (10 points) Which of the following statements is most accurate? A. If the term structure based on the liquidity theory is normal, the market expects future short-term interest rates to be higher than current short-term interest rates. B. If the pure expectations hypothesis of the term structure is correct, U.S. Department of the Treasury can save borrowing cost by the following action: stop issuing 15-year bonds and replace them by issuing a series of 5-year notes. C. The pure expectations hypothesis of the term structure does not fail to recognize risk premium. Please circle the right answer and explain why the other two answers are wrong