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Return to maturity expectations |
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Return to maturity expectationsA variant of pure expectations theory that suggests that the return an investor will realize by rolling over short-term bonds to some investment horizon will be the same as holding a zero-coupon bond with a maturity that is the same as that investment horizon.Return to maturity expectations Similar MatchesHomogeneous expectations assumptionHomogeneous expectations assumptionAn assumption of Markowitz portfolio construction that investors have the same expectations with respect to the inputs that are used to derive efficient portfolios: asset returns, variances, and covariances. Rational expectationsRational expectationsThe idea that people rationally anticipate the future and respond today to what they see ahead. This concept was pioneered by Nobel Laureate, Robert E. Lucas, Jr. Unbiased expectations hypothesisUnbiased expectations hypothesisTheory that forward exchange rates are unbiased predictors of future spot rates. See Forward parity. Local expectations theoryLocal expectations theoryA form of the pure expectations theory that suggests that the returns on bonds of different maturities will be the same over a short-term investment horizon. Expectations theory of forward exchange ratesExpectations theory of forward exchange ratesA theory of foreign exchange rates that states that the expected future spot foreign exchange rate t periods from now equals the current t-period forward exchange rate. Further SuggestionsLocal expectations hypothesis (LEH)Expectations hypothesis theories |
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