CENGAGE MINDTAP Ch 06- Assignment - Interest Rates Attempts 6. Pure expectations theory Average / 4 The pure expectations theory, or the expectations hypothesis, asserts that long-term interest rates can be used to estimate future short-term interest rates. Based on the pure expectations theory, is the following statement true or false? The pure expectations theory assumes that a one-year bond purchased today will have the same return as a one-year bond purchased five years from now. O False O True

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