Question

The implication of the expectations theory that expected returns for a holding period must be the same for bonds of different maturities depends on the assumption that________.

1. Yiels curves usually slope downward
2. Yiels curves usually slope downward
3. Instruments with different maturities are perfect subtitute
4. Savers are usually risk averse

Answer 1

i think the answer is intruments with different matuirties are perfect subtitute. i'm not sure but i think this is the answer.

Step-by-step explanation: