CFA Practice Question

There are 147 practice questions for this study session.

CFA Practice Question

Which of the following statement is false?
A. The unbiased expectations theory suggests that the total return over a 6-month horizon for a 5-year zero-coupon bond would be the same as for a 15-year zero-coupon bond.
B. All expectation theories assume that the forward rates in current long-term bonds are closely related to the market's expectations about future short-term rates.
C. The return over any investment period would be uncertain under any term structure theories.
Explanation: The unbiased expectations theory assumes that forward rates are perfect predictors of future interest rates and returns are certain and independent of the maturity of the investment acquired.

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