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) recognises that forward rates are perfect predictors of future interest rates
D) assumes that risk premiums increase uniformly with maturity