The argues that the shape of the yield curve is an indication of the expected level of future short-term interest rates Expectations Theory Liquidity Preference Theory Market Segmentation Theory None of the above If short-term interest rates are expected to average 2% per year, over the next 2 years, then the theory predicts that 2-year bonds will have an interest rate of as well Liquidity preference theory; more than 2% Market segmentation theory; Exactly 2% Expectations theory; less than 2% None of the above FORWARD RATE. Using the following data, calculate the forward rate on a 2-year bond, 3 years from today; i.e. 3r2. 5.85% 5.87% 5.89% None of the above