Which of the Following Statements Is CORRECT

question 68

Multiple Choice

Which of the following statements is CORRECT?

• A) The most likely explanation for an inverted yield curve is that investors expect inflation to increase.
• B) The most likely explanation for an inverted yield curve is that investors expect inflation to decrease.
• C) If the yield curve is inverted, short-term bonds have lower yields than long-term bonds.
• D) Inverted yield curves can exist for Treasury bonds, but because of default premiums, the corporate yield curve can never be inverted.
• E) The higher the maturity risk premium, the higher the probability that the yield curve will be inverted.

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Definitions:

Homeostasis

The tendency of a biological system to maintain internal stability and equilibrium despite changes in the external environment.

Body Functions

Refer to the physiological functions of body systems, including motor, sensory, and cognitive functions.

Secondary Drive

A learned drive that is not directly related to biological needs but rather emerges through the association with primary drives or needs.

Acquired Drives

Psychological needs or desires that are developed through experience or learned associations rather than innate.