If Market Participants Don't Expect Yield to Go Up a Year

question 8

Essay

If market participants don't expect yield to go up a year from now, can the yield curve be upwards sloping? Why?

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Definitions:

Supply and Demand

Economic model of price determination in a market that concludes that the price of a good is determined by its availability (supply) and the desires of those with purchasing power (demand).

Broadly Defined Good

Broadly defined goods encompass a range of products or services that cater to a wide variety of needs and preferences in the market.

Available Substitutes

Alternative products or services that consumers can use in place of another product or service.

Inelastic Portion

The segment of a demand curve where the quantity demanded changes very little with a change in price.