1.- According to the expectations hypothesis, when long-term interest rates are higher than short-term interest rates, short-term rates are expected to rise.
2.- Eurodollar certificates of deposit
are not marketable investments.
are used by banks to loan out funds to anyone seeking U.S. dollars.
pay interest rates usually lower than the rates on U.S. treasury bills.
are European currencies deposited into international U.S. branch banks.