If the Yield Curve Has a Mild Upward Slope,the Liquidity

question 9

Multiple Choice

If the yield curve has a mild upward slope,the liquidity premium theory (assuming a mild preference for shorter-term bonds) indicates that the market is predicting

• A)a rise in short-term interest rates in the near future and a decline further out in the future.
• B)constant short-term interest rates in the near future and further out in the future.
• C)a decline in short-term interest rates in the near future and a rise further out in the future.
• D)a decline in short-term interest rates in the near future and an even steeper decline further out in the future.

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Definitions:

Implicit Self-esteem

An automatic, non-conscious aspect of self-esteem reflecting a person's underlying self-evaluation.

Explicit Self-esteem

The conscious and deliberate evaluation of one's worth or value as an individual.

Reflected Glory

The phenomenon of basking in the success or positive attributes of another person or group to which one is connected, enhancing one's self-esteem.

Implicit Self-esteem

A form of self-esteem that is revealed by subconscious or automatic responses rather than conscious reflection.