According to the Liquidity Premium Theory,a Yield Curve That Is

question 103

Multiple Choice

According to the liquidity premium theory,a yield curve that is flat means that

• A)bond purchasers expect interest rates to rise in the future.
• B)bond purchasers expect interest rates to stay the same.
• C)bond purchasers expect interest rates to fall in the future.
• D)the yield curve has nothing to do with expectations of bond purchasers.

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Definitions:

Lacteal

One of the many lymphatic vessels in the intestinal villi that absorb fat.

Lipid Digestion

The biochemical process of breaking down fats into fatty acids and glycerol in the digestive system for absorption and use by the body.

Gastrin

A hormone released by the stomach mucosa; stimulates the gastric glands to secrete pepsinogen.

Acid-Secreting Glands

Glands in the body that release acid, such as the gastric glands in the stomach which secrete hydrochloric acid.