According to the Expectations Theory, If Next Year's Expected Short-Term

Multiple Choice

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

A) the current long-term rate will be below the current short-term rate.
B) the current long-term rate will be above the current long-term rate.
C) the current long-term rate will be horizontal.
D) the current long-term rate will be vertical.