Local expectations hypothesis

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Local expectations hypothesis (LEH)

Theory that bonds similar in all aspects except maturity will have the same holding-period rate of return.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Local Expectations Hypothesis

A theory that bonds identical in every way except the length of maturity will have the same rate of return over a holding period. That is, if an investor buys the same amount of two bonds, each paying 5% interest payable twice per year but with one having a maturity of 10 years and the other 15, the investor will receive the same return from each bond if he/she holds both for the same amount of time. This is because the coupon payments are identical for both bonds, and coupons form the bulk of a bond's return.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
The WASA experts say that after this measure, it is expected that water level in Nullah Leh will not exceed beyond dangerous levels.
'There are two problems which created mess every year: encroachments on the banks of Leh Nullah and dumping of solid waste and construction waste material into the nullah.
The Leh Expressway from Peshawar More to Swan will be completely signal free and with the completion of this project it will take a few minutes to reach Islamabad from Rawalpindi and back.
Sir Henry Riley, Chairman of the Board of Directors, added: "LEH Pharma has pioneered the very latest in eye implants for macular degeneration.
Kingfisher Airlines, Jet Airways Indian Airlines provided free cargo space for the Leh relief material which enabled CDRN in efficient logistics and helped in economizing relief operations.
On Sunday, Air India operated three special flights from Delhi to Leh and back to evacuate stranded tourists.
The Rescue 1122 requested people not to stand on the banks of low-lying areas along Leh Nullah during rainfall and follow instructions issued by the flood control department.
The minister said cost of the Leh Expressway project had jumped to Rs70 billion which was around Rs18 billion when conceived.
RAWALPINDI: The Punjab government had decided to link the establishment of a sewerage treatment plant for Rawalpindi with the Leh Expressway and flood channel project.
Similarly, monitoring of Nullah Leh water level is continuously being carried out.
Leh's sole hospital struggles to cope with casualties