To account for risk in the expectations theory of the term structure we: Answer

Question

To account for risk in the expectations theory of the term structure we: Answer set the n period rate equal to the risk premium. add a risk premium to the current period's 1-year interest rate. add a risk premium to the average of the current one-period rate and expected rates over the next n To account for risk in the expectations theory of the term structure we: To account for risk in the expectations theory of the term structure we: To account for risk in the expectations theory of the term structure we: set the n period rate equal to the risk premium. add a risk premium to the current period's 1-year interest rate. add a risk premium to the average of the current one-period rate and expected rates over the next n set the n period rate equal to the risk premium. add a risk premium to the current period's 1-year interest rate. add a risk premium to the average of the current one-period rate and expected rates over the next n

Explanation / Answer

add a risk premium to the current period's 1-year interest rate.

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