According to the Expectations Theory of the Term Structure

question 57

Multiple Choice

According to the expectations theory of the term structure,

• A) when the yield curve is steeply upward-sloping, short-term interest rates are expected to rise in the future.
• B) when the yield curve is downward-sloping, short-term interest rates are expected to decline in the future.
• C) buyers of bonds prefer short-term to long-term bonds.
• D) all of the above.
• E) only A and B of the above.

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