Assume That a Yield Curve Is Influenced by Interest Rate

question 11

Multiple Choice

Assume that a yield curve is influenced by interest rate expectations and a liquidity premium. Assume the yield curve is initially flat. If liquidity suddenly was no longer important, the yield curve would now have a ____ (assuming no other changes) .

• A)slight downward slope
• B)slight upward slope
• C)steep upward slope
• D)steep downward slope

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Definitions:

Oedipus Complex

A conflict of the phallic stage in which the boy wishes to possess his mother sexually and perceives his father as a rival in love.

Electra Complex

A psychoanalytic concept, proposed by Freud, suggesting a girl's sense of competition with her mother for the affections of her father.

Social Cognitive Theory

A theoretical framework that emphasizes the role of observational learning, social experience, and reciprocal determinism in the development of personality and behavior.

Behaviorism

The school of psychology that defines psychology as the study of observable behavior and studies relationships between stimuli and responses.