The expectations hypothesis / Term structure of interest rates / Part 1

One of the most prominent theories put forward to explain the term structure of interest rates is the expectations hypothesis. In this tutorial, we explain the key features of this theory and discuss how it can explain different shapes of the yield curve.

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00:00 What’s the term structure of interest rates?
01:24 Spot rate, short rate, forward rate
05:10 Understanding the expectations hypothesis
06:33 Long-term vs short-term investors
10:04 Forward rate = expected short rate
10:42 Explaining yield curve shapes

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