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What is the common hypothesis about the behavior of short-term forward rates shared by the various forms of the expectations theory? The various forms of
What is the common hypothesis about the behavior of short-term forward rates shared by the various forms of the expectations theory? The various forms of the expectations theories all assume that: O forward rates are closely related to the market's expectations about future short-term rates. O long term rates include a constantly increasing liquidity risk premium. O long term rates include a risk premium that does not necessarily increase
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