According to the expectations theory of the term structure, the n-period interest rate is the:
A)average of the known interest rates over the next n periods. average of
B)the current one-period rate and expected n-period rate. median of the
C)current one-period rate and expected rates over the next n periods.
D)average of the current one-period rate and expected rates over the next n

Question

Quizplus · Accepted Answer

The expectations theory of the term structure suggests that the n-period interest rate is the average of the current one-period rate and the expected future one-period rates over the next n periods.

According to the Expectations Theory of the Term Structure, the N-Period