Return-To-Maturity Expectations

Business / Finance / Return-To-Maturity Expectations: A 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.

Pure Expectations Theory

Business / Finance / 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 e MORE

Rational Expectations

Business / Finance / Rational Expectations: The 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. MORE

Return-To-Maturity Expectations

Business / Finance / Return-To-Maturity Expectations: A 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 MORE

Local Expectations Theory

Business / Finance / Local Expectations Theory: A 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. MORE

Homogeneous Expectations Assumption

Business / Finance / Homogeneous Expectations Assumption: Exhibiting a high degree of homogeneity. MORE

Expectations Hypothesis Theories

Business / Finance / Expectations Hypothesis Theories: Refers to options that are more complex than simple puts or call options. For example, a Caput is a call option on a put option. MORE

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