Meaning PURE EXPECTATIONS THEORY: A theory that asserts that forward rates exclusively represent the expected future rates. In other words, the entire term structure reflects the market's expectations of future short-term rates. For example, an increasing slope to the term structure implies increasing short-term interest rates. Related: Biased expectations theories
More terms such as Pure expectations theory in Dictionary P.
- Definition Purchase Fund:
- Examples Resembles a sinking fund, except that money is used to purchase bonds only if they are selling below their par value pure expectations theory definition.
- Definition Par Value:
- Examples Also called the maturity value or face value; the amount that an issuer agrees to pay at the maturity date pure expectations theory explain.
- Definition Product Cycle:
- Examples The time it takes to bring new and/or improved products to market pure expectations theory what is.
- Definition Pickup:
- Examples The gain in yield that occurs when a block of bonds is swapped for another block of higher-coupon bonds pure expectations theory meaning.
- Definition Pivot:
- Examples Price level established as being significant by market's failure to penetrate or as being significant when a sudden increase in volume accompanies the move through the price level pure expectations theory abbreviation.
