According to the Expectations Theory of the Term Structure of Interest

Multiple Choice

According to the expectations theory of the term structure of interest rates,

A) a short-term interest rate is equal to the average of current and expected future long-term interest rates.
B) a short-term interest rate has no relation to long-term interest rates.
C) a long-term interest rate is equal to the average of current and expected future short-term interest rates.
D) the yield curve is always flat.