Why Can't the Expectations Hypothesis Stand Alone as an Adequate

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The Answer is The Expectations Hypothesis does a good job of explaining why interest rates of different maturities move together and for explaining why short-term rates are more volatile than long-term rates.What it cannot do is explain why yield curves usually are upward sloping.To use only expectations hypothesis implies that investors usually expect short-term interest rates to rise, which certainly is not the case.

Why Can't the Expectations Hypothesis Stand Alone as an Adequate

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Why Can't the Expectations Hypothesis Stand Alone as an Adequate

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