The Unbiased Expectations Theory of the Term Structure of Interest

Multiple Choice

The unbiased expectations theory of the term structure of interest rates

A) assumes that long-term interest rates are an arithmetic average of short-term rates.
B) assumes that the yield curve reflects the market's current expectations of future short-term interest rates.
C) recognizes that forward rates are perfect predictors of future interest rates.
D) assumes that risk premiums increase uniformly with maturity.
E) None of the above.