Why is it unlikely that the expectations theory alone is


1. Why is it unlikely that the expectations theory alone is the correct theory for explaining the yield curve?

2. Is terminal value a crucial part of the valuation estimate for a firm? Explain your yes or no answer. Also explain the challenges with estimating terminal value.

3. Explain why a mortgage-backed security becomes riskier when the values of the underlying houses decline. What, as a result, happens to the price of the mortgagebacked security?

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Financial Management: Why is it unlikely that the expectations theory alone is
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