Business, 06.05.2020 03:57 Jayla1029

If the YTM on a 20 year T-bond is lower than the YTM on a 3 month T-bill, then, according to the expectations hypothesis theory,

A. Investors expect future short rates to be higher than the current 3 month interest rate.
B. Investors expect future short rates to be equal to the current 3 month interest rate.
C. Investors expect future short rates to be lower than the current 3 month interest rate.

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If the YTM on a 20 year T-bond is lower than the YTM on a 3 month T-bill, then, according to the exp...

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