Based Solely on the Maturity Preference Theory, Long-Term Interest Rates

question 42

Multiple Choice

Based solely on the maturity preference theory, long-term interest rates:

• A)should equal short-term rates.
• B)are unrelated to short-term rates.
• C)may be higher than or lower than short-term rates.
• D)should be lower than short-term rates.
• E)should be higher than short-term rates.

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