When Yield Curves Are Flat

question 11

Multiple Choice

When yield curves are flat

• A)long-term interest rates are above short-term interest rates.
• B)short-term interest rates are above long-term interest rates.
• C)short-term interest rates are about the same as long-term interest rates.
• D)medium-term interest rates are above both short-term and long-term interest rates.

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Definitions:

Functional Currency

It's the currency of the primary economic environment in which an entity operates and generates cash flows.

Exchange Rates

The price at which one currency can be exchanged for another, influencing international trade and investments.

Exchange Gain

A profit realized from the increase in value of foreign currency assets due to favorable changes in exchange rates.

Functional Currency

A company's primary currency used in its operations and financial reporting, often where the company principally generates and expends cash.