Biased Expectations Theory

Filed Under » ,
Dictionary Says

Definition of 'Biased Expectations Theory'

A theory that the future value of interest rates is equal to the summation of market expectations. Proponents of the biased expectation theory argue that the shape of the yield curve is created by ignoring systematic factors and that the term structure of interest rates is solely derived by the market's current expectations. 
Investopedia Says

Investopedia explains 'Biased Expectations Theory'

Two common biased expectation theories are the liquidity preference theory and the preferred habitat theory. The liquidity preference theory suggests that long-term bonds contain a risk premium and the preferred habitat theory suggests that the supply and demand for different maturity securities are not uniform and therefore there is a difference risk premium for each security.
Search results for

'Biased Expectations Theory'

  • CFA Level 1 Study Guide - Fixed Income Investments - The Term ...

    http://www.investopedia.com/exam-guide/cfa-level-1/fixed-income-investments/interest-rate-term-structure.asp
    ... 4.26 Monetary Policy and Price Level Stability; 4.27 Expectations of Monetary Policy. ...
    The Tradeoff Theory of Leverage; 11.28 Signaling Prospects Through Financing ...

  • Is Electronic Arts Worth Playing?

    http://stocks.investopedia.com/stock-analysis/2009/Is-Electronic-Arts-Worth-Playing-ERTS-MSFT-TTWO-ATVI1017.aspx
    ... (For more on analyst expectations, be sure to read Analyst Forecasts Spell Disaster
    For Some Stocks.). ... I'm not biased against Electronic Arts. ...

  • Should You Head Back To Business School?

    http://www.investopedia.com/articles/professionaleducation/08/business-school.asp?partner=aol-d
    ... A mismatch in expectations can be costly, both financially and in time expended. ...
    Is Biased Investing Holding You Back? Is Biased Investing Holding You Back? ...

  • The Flow Of Company Information

    http://www.investopedia.com/articles/basics/07/flow_of_information.asp
    ... performance for a quarter is not tracking Wall Street's expectations or its ... the
    management teams of public companies are the most biased market participants ...

  • CFA Level 1 Study Guide - Corporate Finance - Comparing Projects ...

    http://www.investopedia.com/exam-guide/cfa-level-1/corporate-finance/comparing-projects-unequal-lives.asp
    ... 4.26 Monetary Policy and Price Level Stability; 4.27 Expectations of Monetary Policy. ...
    The Tradeoff Theory of Leverage; 11.28 Signaling Prospects Through Financing ...

  • Women And Finances: Is There A Gender Bias?

    http://www.investopedia.com/articles/pf/07/female_finance.asp
    ... entitled "Gender and the Career Choice Process: The Role of Biased Self-Assessments ...
    Lower Raise Expectations Women tend to be less assertive than men about ...

  • Forces That Move Stock Prices

    http://www.investopedia.com/articles/basics/04/100804.asp
    ... Multiple The valuation multiple expresses expectations about the ... sentiment is often
    subjective, biased and obstinate. ... to capitalize on the theory of behavioral ...

  • CFA Level 1 Study Guide - Alternative Investments - Hedge Fund ...

    http://www.investopedia.com/exam-guide/cfa-level-1/alternative-investments/hedge-fund-risks-performance.asp
    ... 4.26 Monetary Policy and Price Level Stability; 4.27 Expectations of Monetary Policy. ...
    The Tradeoff Theory of Leverage; 11.28 Signaling Prospects Through Financing ...

  • Listen To The Market, Not Its Pundits

    http://www.investopedia.com/articles/stocks/09/pundits.asp
    ... The Livingston Survey, the oldest continuous survey of economists' expectations,
    is a good ... is structured, it's difficult to find a pundit who is not biased. ...

  • 401(k) Predators: Don't Become Prey

    http://www.investopedia.com/articles/retirement/09/401k-predator.asp
    ... Many financial advisors in these seminars offer biased product recommendations as
    a means ... high rates of return because this leads to unrealistic expectations. ...

Related Articles

Partner Links