- Under The Pure Expectations Theory If Issuers Expect Interest Rates To Increase There Is Downward Pressure On The Yiel 1 (30.58 KiB) Viewed 44 times
Under the Pure Expectations Theory, if issuers expect interest rates to increase, there is downward pressure on the yield of short-term funds. Othey will prefer to lock in the present interest rate over a long period of time. Only one statement is correct. borrowers will generally prefer to issue short-term securities rather than long-term securities. the corresponding decrease in the demand for long-term funds by borrowers places downward pressure on long-term funds. Three statements are correct. Two statements are correct.