bapswarrior

Pure Expectations theory...
is the expected interest rate that would prevail in the markets in the future ( say 1 year from now)...

Means if the expected IR in the market 1 year from now for 1 year is 5%
if expected IR in the market 2 years from now from now for 1 year is 6 %
if expected IR in the market 3 years from now from now for 1 year is 7 %

and so on...


This is will give us an upward sloping Yield curve

Thanks,
Varun Darji