Consider the following data obtained on Treasury STRIPS of various maturities.

N Yield

1 1.25%

2 1.85%

3 2.35%

According to the pure expectations hypothesis, the rate of return one would expect to earn over a 3-year period in an investment in any of the above securities would be

• A. the same, regardless of the maturity

• B. greater the longer the maturity

• C. less for shorter maturities

• D. greater for shorter maturities