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Question
If an investor has a six-month investment horizon, buying a 5-year, 10-year, or 20-year bond will produce the same six-month return. This interpretation of the pure expectations theory is referred to as the:a. Return-to-maturity expectation.
b. Local expectations.
c. Broadest interpretation.
d. Liquidity theory.
e. None of the above.
Answer
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