Ask Question
BusinessBusiness
7 April, 10:20

Based on the pure expectations theory, is the following statement true or false?

The pure expectations theory assumes that a one-year bond purchased today will have the same return as a one-year bond purchased five years from now.

a. True

b. False

+5
Answers (1)
  1. 7 April, 10:35
    0
    The correct answer is letter "B": False.

    Explanation:

    The Pure Expectations Theory uses long-term interest rates to predict future interest rates in the short run. Investors consider different investments to predict future interest rates. In the example, the statement indicates the opposite. It is taking a short-term interest rate (one-year bond), to calculate the return of a long-term investment (five-year bond).
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Based on the pure expectations theory, is the following statement true or false? The pure expectations theory assumes that a one-year bond ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
If the exchange rate between the European euro and the U. S. dollar is 1 to 1.2, which of the following is true? A. A $5 item costs twice as much in euros. B. A $5 item costs less than five euros. C. A $5 item costs half as much in euros. D.
Answers (1)
Conduct online research and briefly discuss the role that small entrepreneurial businesses play in the US economy. Describe how small businesses contribute to employment to the US economy.
Answers (1)
Identify the term that refers to agreements made between researchers and subjects, through the consent process, and how researchers will protect information provided by the subjects. a. Privacy b. Identifiable c. Confidentiality d. Ownership
Answers (1)
Which of the following is true of investors using options to manage risk? A. Investors can hedge against a price decline by buying a call option. B. Investors can hedge against a price decline by buying a put option. C.
Answers (1)
According to the Office of Federal Contract Compliance Programs (OFCCP), one of the criteria for an individual to qualify as an Internet applicant for a job is to:
Answers (1)
New Questions in Business
Assume a company had the following production costs: Direct labor $ 2 per unit Direct material $ 3 per unit Variable overhead $ 4 per unit Total variable $ 9 per unit Fixed overhead ($50,000/10,000 units) $ 5 per unit Total production cost $ 14 per
Answers (1)
You look up the phone number of the new pizza hut and repeat the number silently in your head until you find a pad of paper to write it down. the process of actively repeating the number is called
Answers (1)
This simply means a general agreement: a. Consignment c. Conscription b. Consensus d. Continuity
Answers (1)
Building a specific, unique product for one customer is called processing true or false
Answers (1)
Which of the following is the normative answer to the question of why some of the world's states use a federal system? A.
Answers (1)
Home » Business » Based on the pure expectations theory, is the following statement true or false? The pure expectations theory assumes that a one-year bond purchased today will have the same return as a one-year bond purchased five years from now. a. True b. False
Sign Up Forgot Password?