If Liquidity Influences the Yield Curve, but Is Not Considered

Multiple Choice

If liquidity influences the yield curve, but is not considered when deriving the forward interest rate, the forward interest rate ____ the market's expectation of the future interest rate.

A) overestimates
B) accurately estimates
C) underestimates
D) is an unbiased forecast of (it has an equal chance of overestimating or underestimating)