An Inverted Yield Occurs When

question 13

Multiple Choice

An inverted yield occurs when

• A)long-term interest rates are higher than short-term interest rates.
• B)long-term interest rates are the same as short-term interest rates.
• C)long-term interest rates are lower than short-term interest rates.
• D)short-term interest rates are lower than mid-term interest rates, which are higher than long-term interest rates.

---

Definitions:

Payment

The transfer of money, goods, or services from one party to another in exchange for something of value, often fulfilling a contractual obligation or debt.

Interest Rates

The expense associated with acquiring a loan, usually represented as a proportion of the sum lent.

Better Off

A condition in which an individual or group's situation improves in terms of economic welfare, happiness, or other measures of well-being.

Present Value

The current value of a future sum of money or stream of cash flows, given a specified rate of return.