Assume That the Current Corporate Bond Yield Curve Is Upward

question 72

Multiple Choice

Assume that the current corporate bond yield curve is upward sloping,or normal.Under this condition,we could be sure that

• A) Long-term interest rates are more volatile than short-term rates.
• B) Inflation is expected to decline in the future.
• C) The economy is not in a recession.
• D) Long-term bonds are a better buy than short-term bonds.
• E) Maturity risk premiums could help to explain the yield curve's upward slope.

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Definitions:

Evolutionary Social Psychology

An approach in social psychology that examines how evolutionary principles influence human social behavior, thoughts, and emotions.

Ethology

Approach that argues that animal behaviour should be studied in the species’ natural physical and social environment. Behaviour is genetically determined and is controlled by natural selection.

Death Instinct

A psychoanalytic concept suggesting that individuals possess an unconscious wish to die or self-destruct, counterbalanced by life-sustaining instincts.

Psychodynamic Approach

A psychological perspective that emphasizes the influence of the unconscious mind on behavior, as well as the dynamics of interpersonal relationships.