The Upward Slope of the Yield Curve Is Caused by Investors

question 50

Multiple Choice

The upward slope of the yield curve is caused by investors' recognition of the relative difficulty of converting long-term securities to cash. This is the:

• A)expectations hypothesis.
• B)liquidity preference theory.
• C)market segmentation theory.
• D)More than one of the above

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Definitions:

Ease of Formation

The simplicity with which a business or company can be legally established, often considered in the context of different types of business entities like corporations, partnerships, and sole proprietorships.

Treasurer

An executive role in a company or organization responsible for managing the institution's finances, including investments, capital structure, and liquidity.

Tax Matters

Issues, policies, and regulations related to taxation and its administration.

Financial Planning

The process of estimating the capital required and determining its competition, Formulating financial policies concerning procurement, investment, and administration of funds of an enterprise.