According to the liquidity premium theory of interest rates,

		long-term spot rates are totally unrelated to expectations of future short-term rates.
		the term structure must always be upward sloping.
		investors prefer certain maturities and will not normally switch out of those maturities.
		long-term spot rates are higher than the average of current and expected future short-term rates.
		investors are indifferent between different maturities if the long-term spot rates are equal to the average of current and expected future short-term rates.