According to the liquidity premium theory of interest rates,

	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.
	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 totally unrelated to expectations of future short-term rates.