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In: Economics

Suppose that investors treat all bond maturities as perfect substitutes. What is this called and what...

Suppose that investors treat all bond maturities as perfect substitutes. What is this called and what would the yield curve look like if there is no future change in expected change in interest rates? Also, show graphically what would happen to the relative yields in short-term maturities and long-term maturities when the Fed engages in quantitative easing.

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Rahul Sunny answered 2 years ago
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