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Expectations Theory suggests that the rate on long-term loans is: O An average between today's rate on short-term loans and the rates expected to

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Expectations Theory suggests that the rate on long-term loans is: O An average between today's rate on short-term loans and the rates expected to prevail on short- term loans in the future Today's short-term loans plus the Fed's prime rate O An average between today's rate on short-term loans and the rates expected to prevail on long term loans in the following years. O Today's short-term loans minus the Fed's prime rate

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