Biology Forums - Study Force

For an institutional investor, if the expectations theory is correct, the average of the expected short-term interest rates over the life of the long-term investment should be roughly equal to the interest rate on the long term investment, which would
A) result in a positive level of profits from an interest-carry-trade strategy.
B) result in an even higher-than-expected level of profits from an interest-carry-trade strategy.
C) result in a high level of negative profits (losses) from an interest-carry-trade strategy.
D) eliminate any potential profits from an interest-carry-trade strategy.

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