The Expectations Theory Suggests That

question 51

Multiple Choice

The expectations theory suggests that

• A)the yield curve should normally be upward-sloping.
• B)the yield curve should normally be downward-sloping.
• C)the slope of the yield curve depends on the expected future path of short-term rates.
• D)the slope of the yield curve reflects the risk premium incorporated into the yields on long-term bonds.

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