The Expectations Theory Suggests That

question 51

Multiple Choice

The expectations theory suggests that

• A) the yield curve should usually be upward-sloping.
• B) the yield curve should usually be downward-sloping.
• C) the slope of the yield curve depends on the expected future path of short-term rates.
• D) the slope of the yield curve reflects the risk premium incorporated into the yields on long-term bonds.

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