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decrease; decrease in the supply O decrease: decrease in the demand Question 8 1 pts Bonds with different maturities are not considered perfect substitutes. To

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decrease; decrease in the supply O decrease: decrease in the demand Question 8 1 pts Bonds with different maturities are not considered perfect substitutes. To induce investors to invest long-term, the longer-term security must offer an interest rate over what could be earned by investing in short-term bonds and rolling the investment over. This is the logic behind the liquidity premium theory unbiased expectations theory market segmentation theory term structure of interest rates Question 9 1 pts The current one-year T-bill rate is 40 percent and the expected one-year rate 12 months from now is 7.70 percent. According to the unbiased expectations theory, what should be the current rate for a two-year Treasury security? 3.99%

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