If bonds with different maturities are perfect substitutes, then the ________ on these bonds must be...

1) According to the expectations theory of the term structure, the interest rate on a long-term bond will equal the ________ of the short-term interest rates that people expect to occur over the life of the long-term bond.

A) average

B) sum

C) difference

D) multiple

2) If bonds with different maturities are perfect substitutes, then the ________ on these bonds must be equal.

A) expected return

B) surprise return

C) surplus return

D) excess return