If Long-Term Interest Rates Are 8% and Short-Term Rates Are

question 13

Multiple Choice

If long-term interest rates are 8% and short-term rates are 3%, the market expects:

• A) short-term rates to fall.
• B) short-term rates to rise.
• C) short-term rates to remain the same.
• D) there is no relationship between long-term and short-term rates.

---

Definitions:

Hierarchy

Hierarchy is a system in which members of an organization or society are ranked according to relative status or authority.

Consistency

The quality of maintaining uniformity, coherence, and reliability in actions, processes, or results over time.

Editing

The process of reviewing, correcting, and preparing written or multimedia material for publication or presentation.

Conventional System

A traditional or widely accepted method, tool, or approach used for a specific purpose or activity.