According to the Expectations Theory of the Term Structure

question 14

Multiple Choice

According to the expectations theory of the term structure,

• A) yield curves should be equally likely to slope downward as to slope upward.
• B) when the yield curve is steeply upward-sloping, short-term interest rates are expected to rise in the future.
• C) when the yield curve is downward-sloping, short-term interest rates are expected to remain relatively stable in the future.
• D) all of the above.
• E) only A and B of the above.

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