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Investing Glossary:
Liquidity theory of the term structure
Copyright 2010,
Campbell R. Harvey. All Rights Reserved.
Do not reproduce without explicit permission.
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| Term: |
| Liquidity theory of the term structure
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| Definition: |
| A biased expectations theory that asserts that the implied forward rates will not be a pure estimate of the market`s expectations of Future interest rates because they embody a liquidity premium.
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