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An empirical analysis of the expert expectations hypothesis in the US Treasury bill market
Journal article   Peer reviewed

An empirical analysis of the expert expectations hypothesis in the US Treasury bill market

Thomas C. Chiang and Chung Ronald K.
Applied financial economics, v 3(4), pp 329-334
01 Dec 1993

Abstract

This paper proposes the consensus value of the experts' expectations to predict the future three-month Treasury bill rate. Applying quarterly data, 1981 :Q3-1989:Q4, to three- and six-month Treasury bill markets indicates that one cannot reject the unbiasedness hypothesis. Empirical analysis indicates that experts use information from the slope of the yield curve, changes in the recent three-month bill rate, and a time-varying risk premium to predict the change in the future three-month bill rate. This study documents the consensus of experts' expectations as an optimal predictor of the future three-month bill rate.

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