Using the Expectations Theory of Term Structure,a Positively Sloped Yield

question 33

Multiple Choice

Using the expectations theory of term structure,a positively sloped yield curve indicates that investors expect:

• A) falling long-term interest rates.
• B) rising long-term interest rates.
• C) short-term interest rates to be lower in the near future.
• D) short-term interest rates to be higher in the near future.

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Definitions:

Miller

Refers to George A. Miller, a psychologist known for his work on the magical number seven, plus or minus two, related to the limits of human memory capacity.

Iconic Memory

A type of visual sensory memory that holds a brief replica of visual scenes for a very short duration before fading or being processed further.

Visual Copy

An exact reproduction or duplicate of a visual stimulus.

Sensory Item

An object or stimulus that engages one or more of the five senses, designed to have a soothing or stimulating effect.