Differences peh and the liquidity premium theory

Reference no: EM133326244

Case: The yield curve is known to be naturally upward-sloping. However, in recent years, the yield curve of some sovereign bonds has been observed to be inverted.

Question: What are the main differences between the Pure Expectation Hypothesis, PEH and the Liquidity Premium Theory (LPT)?

Reference no: EM133326244

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