According to the Expectations Theory a Downward Sloping Yield Curve

question 50

Multiple Choice

According to the expectations theory a downward sloping yield curve indicates that future short-term rates are expected to _______.

• A)fall
• B)rise
• C)remain unchanged
• D)fluctuate

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Definitions:

Retained Earnings

Profits that a company has reinvested in itself rather than paying out to shareholders as dividends.

Comprehensive Income

This term includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.

Comprehensive Income

A measure of all changes in equity of a company that result from recognized transactions and other economic events of the period other than those resulting from investments by and distributions to owners.

Unrealized Gains

Profits from investments that have increased in value but have not yet been sold for cash.