Forward Rates ____________ Future Short Rates Because ____________

Multiple Choice

Forward rates ____________ future short rates because ____________.

A) are equal to; they are both extracted from yields to maturity
B) are equal to; they are perfect forecasts
C) differ from; they are imperfect forecasts
D) differ from; forward rates are estimated from dealer quotes while future short rates are extracted from yields to maturity
E) are equal to; although they are estimated from different sources, they both are used by traders to make purchase decisions