If One-Period Forward Rates Are Decreasing with Maturity, the Yield

question 53

Multiple Choice

If one-period forward rates are decreasing with maturity, the yield curve is most likely:

• A) flat.
• B) upward sloping.
• C) downward sloping.

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Definitions:

Lingua Franca

A language systematically used to make communication possible between people not sharing a mother tongue, in particular for trade, diplomacy, or cultural exchanges.

Cultural Dimensions

Theoretical frameworks that describe the effects of a society’s culture on the values of its members, and how these values relate to behavior.

Uncertainty Avoidance Index

a measure used in cultural studies to indicate the degree to which a society tolerates uncertainty and ambiguity.

Masculine Culture

A societal or organizational culture that values assertiveness, competition, material success, and achievements, as opposed to more nurturing and relationship-oriented traits.