An Inverted Yield Curve Often Indicates

question 1

Multiple Choice

An inverted yield curve often indicates:

• A) That a change in the central bank governor is impending
• B) That a major democratic election is about to occur
• C) That markets expect a recession to occur
• D) That markets expect an economic upturn

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Definitions:

Leverage

The use of borrowed funds to increase the potential return of an investment, also amplifying the potential risk of loss.

Equity Mutual Funds

Investment funds that pool money from many investors to purchase a portfolio of stocks, aiming to provide returns through dividends and capital gains.

Risky

An adjective describing the likelihood of losing part or all investment due to various types of investment or market risks.

Equity Growth Fund

A mutual fund that invests primarily in stocks with the goal of capital appreciation rather than income.