An Upward-Sloping Yield Curve

question 27

Multiple Choice

An upward-sloping yield curve

• A) may be an indication that interest rates are expected to increase.
• B) may incorporate a liquidity premium.
• C) may reflect the confounding of the liquidity premium with interest rate expectations.
• D) All of the options are correct.
• E) None of the options are correct.

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Definitions:

Annual Rate Of Return

The annual percentage gain or loss on an investment.

No Interest

This term describes financial agreements or products that do not accrue interest.

Postpone

To delay an event or action to a later time.

Per Annum

Annually or per year, often used in the context of interest rates or salaries.