Discuss the main theories on the term structure of interest rates, their differences and similarities.

Discuss the main theories on the term structure of interest rates, their differences and
similarities.
– 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.