# Expectations Theory

## Expectations Theory,

### Expectations Theory:

The expectation theory seeks to predict what the short-term interest rate will be in the future based on the current long-term interest rate. The theory is that if an investor invests in two consecutive years in one-year bonds today, instead of investing in two-year bonds today, he can earn the same interest rate. This theory is also known as the neutral expectation theory.

### Literal Meanings of Expectations Theory

#### Expectations:

##### Meanings of Expectations:
1. I firmly believe that something will or will happen.

2. Another term for expected value

##### Sentences of Expectations
1. Reality does not live up to expectations

2. This is equal to 8.5 and is called the stock expectation under study.

##### Synonyms of Expectations

presumption, projection, calculation, assumption, forecast, supposition, presupposition, belief, prediction, surmise, reckoning, conjecture

#### Theory:

##### Meanings of Theory:
1. The purpose of adopting ideas or creating systems is to explain something, especially based on general principles, regardless of what is explained.

##### Sentences of Theory
1. Darwin's theory of evolution

##### Synonyms of Theory

thesis, feeling, hunch, conjecture, notion, presupposition, hypothesis, postulation, surmise, speculation, postulate, assumption, proposition, guess, presumption, suspicion, supposition, premise

## Expectations Theory,

### What is The Definition of Expectations Theory?

• Expectations Theory means: The expectation theory seeks to predict what the long-term interest rate will be at the current long-term interest rate. The theory is that if an investor invests twice a year in one-year bonds, instead of investing in two-year bonds today, he will earn the same interest rate. This theory is also called the theory of baseless expectations.

### Literal Meanings of Expectations Theory

#### Expectations:

##### Meanings of Expectations:
1. A firm belief that something is happening or is about to happen.

##### Synonyms of Expectations

anticipation, hopefulness, expectancy, assurance, hope, excitement, eagerness, trust, suspense, confidence

#### Theory:

##### Meanings of Theory:
1. A system of assumptions or ideas that aims to explain something, especially based on general principles, regardless of what is to be explained.

##### Synonyms of Theory

philosophy, ideology, contention, thought(s), judgement, opinion, principled explanations, thinking, science, system of ideas, principles, laws, view, concepts, ideas

## Expectations Theory,

### Expectations Theory:

• Expectations Theory can be defined as, The expectation theory tries to predict which long-term interest rate will be based on the current long-term interest rate. The theory is that if an investor invests twice a year in one-year bonds instead of investing in two-year bonds today, he will get the same interest rate. This theory is also called the theory of baseless expectations.

### Literal Meanings of Expectations Theory

#### Expectations:

##### Meanings of Expectations:
1. A strong belief that something will or will happen.

#### Theory:

##### Meanings of Theory:
1. A system of assumptions or ideas aimed at explaining something, especially one based on general principles that are independent of the explanation.