According to the Expectations Theory of the Term Structure

question 85

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 remain relatively stable in the future.
• C) investors have strong preferences for short-term relative to long-term bonds, explaining why yield curves typically slope upward.
• D) all of the above.
• E) only A and B of the above.

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Definitions:

n/30

Payment terms indicating the net amount is due in full within 30 days.

Estimated Returns Inventory

A current asset that is reported on the balance sheet after inventory.

Adjusting

The process of making entries to correct accounts or to account for accruals and deferrals in the accounting cycle.

FOB Destination

A shipping term where the seller is responsible for the freight and other transportation costs until the goods reach the buyer’s specified location.