Under Liquidity Preference Theory,which of the Following Is Always True

question 17

Multiple Choice

Under liquidity preference theory,which of the following is always true?

• A) The forward rate is higher than the spot rate when both have the same maturity.
• B) Forward rates are unbiased predictors of expected future spot rates.
• C) The spot rate for a certain maturity is higher than the par yield for that maturity.
• D) Forward rates are higher than expected future spot rates.

---

Definitions:

Cardiorespiratory Monitor

A device used to track the heart rate and breathing rate of a patient, often used in hospitals to monitor patients critically.

Sinus Rhythm

The normal heartbeat rhythm generated by the sinoatrial node, characterized by a consistent rate and rhythm.

Ventricular Tachycardia

A fast heart rhythm that originates from the ventricles, potentially leading to serious heart conditions.

Atrial Fibrillation

A cardiac arrhythmia characterized by rapid, irregular beating of the atria, leading to decreased blood flow and risk of stroke.