According to the Expectations Theory of Term Structure,if Next Year's

question 71

Multiple Choice

According to the expectations theory of term structure,if next year's short-term interest rate is expected to be higher than the current short-term rate,the:

• A) current short-term rate will be equal to the current long-term rate.
• B) current short-term rate will be higher than the current long-term rate.
• C) current short-term rate will be lower than the current long-term rate.
• D) yield curve will be downward-sloping.

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