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Assuming that the term structure of interest rates is determined as posted by the pure expectations theory, which of the following statement is CORRECT? a.

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Assuming that the term structure of interest rates is determined as posted by the pure expectations theory, which of the following statement is CORRECT? a. Consumer prices as measured by an index of inflation are expected to rise at a constant rate. b. An upward-sloping yield curve implies that future short-term rates are expected to decline. c. The maturity risk premium is assumed to be zero. d. In equilibrium, long-term rates must be equal to short-term rates. e. Inflation is expected to be zero

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