Discuss the main theories on the term structure of interest rates, their differences and similarities. In addition to your general discussion, make sure to address the following questions: – Various versions of the expectations theory address the behaviour of short-term forward rates. Explain the common hypothesis. – What are the main types of risks associated with investing in bonds and how do these two risks affect the pure expectations theory? – Explain the two biased expectations theories about the term structure of interest rates.

Explain the main features of exchange traded funds, including the creation/redemption process.
– What are the advantages of an ETF relative to open-end and closed-end investment companies?
– Explain what is meant when exchange traded funds are said to be actively managed funds.
– Explain the role of the authorized participant in an ETF.