Which of the Following Statements Is CORRECT

question 48

Multiple Choice

Which of the following statements is CORRECT?

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

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Definitions:

Seligman

Associated with Martin Seligman, a psychologist known for his work on learned helplessness, positive psychology, and well-being.

Attribution Retraining

A psychological intervention technique designed to help individuals change the way they interpret causes of events, particularly from seeing failures as internal and fixed to external and variable.

Unstable Attributions

Explanations for behavior or outcomes that suggest variability and can change over time or situations.

Balance as Midrange

An equilibrium state achieved by maintaining a moderate position between two extremes in various aspects of life or theory.