Local Expectations Theory states that over a very short investment horizon, the expected return from long-term bonds will be approximately equal to the expected return from short-term bonds.
Local Expectations Theory states that over a very short investment horizon, the expected return from long-term bonds will be approximately equal to the expected return from short-term bonds.
Though this is not true in real world the local expectation theory states for a specific short term period the rate of return should roughly be the same for bonds of different maturities
Madhu Chandarasekaran, CFA