According to the Expectations Hypothesis, If Investors Believed That, for a Given

question 92

Multiple Choice

According to the Expectations Hypothesis, if investors believed that, for a given holding period, the average of the expected future short-term yields was greater than the long-term yield for the holding period, they would act so as to drive:

• A)down the price of the short-term bond and drive up the price of the long-term bond.
• B)up the price of the short-term bond and drive down the price of the long-term bond.
• C)up the prices of both the short- and long-term bonds.
• D)down the prices of both the short- and long-term bonds.

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Definitions:

Predispositions

Innate tendencies or inclinations that influence behaviors or outcomes, often considered in the context of genetics and behavior.

Genetic Enhancements

The use of biotechnology to modify an organism's DNA to enhance physical or intellectual traits beyond what is considered typical for the species.

Therapeutic Cloning

A biomedical technique involving the creation of a clone to produce stem cells identical to the donor's for the purpose of treating diseases or damaged tissues.

Non-Therapeutic Cloning

Cloning conducted for purposes other than health treatment, often related to research or the production of genetically identical organisms.