The of the term structure of interest rates states that the interest rate on a long-term bond will equal the average of short-term interest rates that individuals expect to occur over the life of the long-term bond, and investors have no preference for short-term bonds relative to long-term bonds.

The correct answer is Theory of the term structure.

Explanation:

The theory of expectations is related to the situation that interests in a long period refer to own reflections of expectations in the markets in which it trades under short-term periods. Its foundation in the conditions established in the short and long-term interest rates, which are subject to expansion which would mean receiving higher income.

u = 30

continuing your method

= +

subtract from both sides

= - thus

= -

= ⇒ u = 30