An Inverted Yield Curve Implies That

question 65

Multiple Choice

An inverted yield curve implies that

• A) long-term interest rates are lower than short-term interest rates.
• B) long-term interest rates are higher than short-term interest rates.
• C) long-term interest rates are the same as short-term interest rates.
• D) intermediate-term interest rates are higher than either short- or long-term interest rates.
• E) None of the options are correct.

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Definitions:

Prompt Payment Discount

A discount offered to customers for paying their invoices early, serving as an incentive for quicker payment.

Credit Bureaus

Organizations that collect and maintain individual credit information, supplying it to creditors to help them decide whether to lend money.

Credit Applicant

An individual or entity that applies for a loan or credit from a financial institution or lender.

Accounts Receivable

Financial obligations customers have towards a business for utilized or received goods and services that remain unpaid.