Liquidity theory of the term structure

A biased expectations theory that asserts that the implied forward rates will not be a pure estimate of the market's expectations of future interest rates because they embody a liquidity premium.

Liquidity Theory of the Term Structure

A theory stating that forward rates do not accurately predict future spot rates because forward rates are more liquid and therefore include a liquidity premium. The theory attempts to explain with the unbiased expectations theory is not borne out in real life.

单词	liquidity theory of the term structure
释义	Liquidity theory of the term structure Liquidity theory of the term structure A biased expectations theory that asserts that the implied forward rates will not be a pure estimate of the market's expectations of future interest rates because they embody a liquidity premium. Liquidity Theory of the Term Structure A theory stating that forward rates do not accurately predict future spot rates because forward rates are more liquid and therefore include a liquidity premium. The theory attempts to explain with the unbiased expectations theory is not borne out in real life.
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