According to the expectations theory, which of the following statements is INCORRECT?

a. An expected decrease in interest rates will boost the prices and yields of short-term securities.

b. The theory assumes no transaction costs

c. An expected decrease in interest rates will result in a downward sloping yield curve.

d. We will observe a flat yield curve when investors expect future short rates to be the same as the current short rate.

e. The term structure is determined only by expectations of future short interest rates.