Question

The pure expectations theory, or the expectations hypothesis, asserts that long-term interest rates can be used to estimate future short-term interest rates. A. trueB. false

Answer 1

The answer is True

Step-by-step explanation:

"The pure expectations theory, or the expectations hypothesis, asserts that long-term interest rates can be used to estimate future short-term interest rates" is true statement.

The expectation theory asserts that a one - year bond is purchased today will have the same yield and effect as the one - year bond purchased after five years. Both long term and short terms estimates are similar to each other.