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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