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Expectations hypothesis theories

• Theories of the term structure of interest rates which include the pure expectations theory, the liquidity theory of the term structure, and the preferred habitat theory. These theories hold that each forward rate equals the expected future interest rate for the relevant period. These three theories differ, however, on whether other factors also affect forward rates, and how.

 
 Embedded terms in definition
 Expectations
Forward rate
Forward
Future
Interest rate
Interest
Liquidity theory of the term structure
Liquidity
Preferred habitat theory
Pure expectations theory
Term structure of interest rates
Term structure
 
 Related Terms
 Biased expectations theories
Efficient market hypothesis
Expectations
Expectations hypothesis
Expectations theory of forward exchange rates
Homogenous expectations assumption
Liquidity preference hypothesis
Local expectations theory
Overreaction hypothesis
Pure expectations theory
Rational expectations
Return to maturity expectations

<< Expectations hypothesis Expectations theory of forward exchange rates >>

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