The Upward Slope of the Yield Curve Is Caused by Investors

question 50

Multiple Choice

The upward slope of the yield curve is caused by investors' recognition of the relative difficulty of converting long-term securities to cash. This is the:

• A)expectations hypothesis.
• B)liquidity preference theory.
• C)market segmentation theory.
• D)More than one of the above

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Definitions:

Conditioned Stimulus

A previously neutral stimulus that, after becoming associated with an unconditioned stimulus, evokes a conditioned response.

Unconditioned Stimulus

An unconditioned stimulus is a stimulus that automatically triggers a reflexive response without any prior learning or conditioning.

Discrimination

Unjust or prejudicial treatment of different categories of people, especially on the grounds of race, age, or sex.

Generalization

The process in learning where a response to a specific stimulus is extended to include responses to similar stimuli.