Based on Expectations Theory, the Term Structure of Interest Rates

question 98

Multiple Choice

Based on expectations theory, the term structure of interest rates will be ________ anytime investors believe that interest rates will be higher in the future than they are today.

• A)volatile
• B)flat
• C)downward sloping
• D)upward sloping
• E)vertical

---

Definitions:

Left-Brained

Referring to an outdated theory where an individual is thought to be more analytical and logical, supposedly due to the dominant use of the left hemisphere of the brain.

Hemisphere Specialization

The concept that certain functions are more dominantly handled by one of the two hemispheres of the brain.

Corpus Callosum

A broad band of nerve fibers joining the two hemispheres of the brain.

Logical Functioning

The process of reasoning that involves the systematic and methodical analysis of propositions, statements, or concepts based on established principles and rules.