Which of the Following Statements Is Correct

question 109

Multiple Choice

Which of the following statements is correct?

• A) If the unbiased expectations theory is correct, we could see an inverted yield curve.
• B) If a yield curve is inverted, long-term bonds have higher yields than short-term bonds.
• C) If the maturity risk premium is zero, the yield curve would be flat.
• D) If the unbiased expectations theory is correct, the maturity risk premium is zero.

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Definitions:

Figure-ground Distinction

The perceptual separation of an object (the figure) from its surroundings (the ground), a fundamental process in visual organization.

Perceptual Constancy

The psychological feature that allows the brain to perceive objects as unchanging despite changes in sensory input, such as shifts in lighting, angle, or distance.

Coherency

The quality of being logical, consistent, and able to be comprehended as a whole.

Reversibility

Reversibility is a concept in cognitive development, referring to the ability to recognize that numbers or objects can be changed or returned to their original condition.