Under the Expectations Theory If Market Participants Expect That Future

question 22

Multiple Choice

Under the expectations theory if market participants expect that future short-term rates will be higher than current short-term rates, the yield curve will

• A)slope upward.
• B)slope downward.
• C)be flat.
• D)slope upward, slope downward, or be flat, depending on risk, liquidity, cost of information, and tax considerations.

---

Definitions:

High School

An educational institution for teenagers that follows primary education and prepares them for higher education or employment.

College

An institution of higher learning that offers undergraduate programs, typically leading to a bachelor's degree.

Parental Behavior

Parental behavior involves the actions and strategies used by parents in raising their children, which can affect the child's psychological and emotional development.

Children's Behavior

The range of actions and mannerisms exhibited by children as they interact with others and respond to their environment.