Which of the Following Statements Is CORRECT

question 76

Multiple Choice

Which of the following statements is CORRECT?

• A) Downward sloping yield curves are inconsistent with the expectations theory.
• B) The actual shape of the yield curve depends only on expectations about future inflation.
• C) If the pure expectations theory is correct,a downward sloping yield curve indicates that interest rates are expected to decline in the future.
• D) If the yield curve is upward sloping,the maturity risk premium must be positive and the inflation rate must be zero.
• E) Yield curves must be either upward or downward sloping - they cannot first rise and then decline.

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Definitions:

Syntax

The set of rules, principles, and processes that govern the structure of sentences in a given language, especially the order of words.

Critical Period

A specific time during development when the presence or absence of certain experiences can have profound and irreversible effects on the development of the brain and behavior.

Language

A method of conveyance specific to a certain community or nation, characterized by the structured and customary arrangement of words.

Linguistic Determinism

The hypothesis that language shapes the way its speakers think and perceive the world.