Exam 3: The Structure of Interest Rates

-Refer to Figures A, B, and C. According to expectations theory, which of the figures reflects expectations that the short-term interest rate is expected to remain constant in the future but that borrowers and lenders also must be compensated with a liquidity premium for lending long?

According to the expectations theory, if the 1-year rate is 2.5% and the 2-year rate is 3.64%, the expected 1-year rate would be

-According to expectations theory, which of the figures above reflects expectations of a rise in the interest rate on short-term securities?

-Refer to Figures A, B, and C. According to expectations theory, which of the figures best reflects a situation where i?>i???

-Refer to Figures A, B, and C. According to expectations theory, which of the figures is most likely to be associated with expected growth in income, expected increases in prices, and slower growth of money supply?

According to the expectations theory, if next year's expected short-term rate is below the current short-term rate,

-Refer to Figures A, B, and C. According to expectations theory, which of the figures above reflects expectations of a fall in the interest rate on short-term securities?