According to the Expectations Theory,which of the Following Is False

question 29

Multiple Choice

According to the expectations theory,which of the following is false?

• A) It assumes that instruments with different maturities are perfect substitutes.
• B) It implies that a long-term bond rate equals the average of short-term rates covering the same investment period.
• C) It implies that the yield curve will usually slope upward.
• D) It implies that the shape of the yield curve depends on the expected pattern of future short-term rates.

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Definitions:

Health Coverage

Insurance that typically pays for medical, surgical, prescription drug, and sometimes dental expenses incurred by the insured.

Family and Medical Leave Act

A U.S. federal law that provides eligible employees with unpaid, job-protected leave for family and medical reasons.

Foreseeable

Able to be anticipated or predicted based on current knowledge or understanding.

National Labor Relations Act

U.S. legislation enacted in 1935 to protect the rights of employees and employers, to encourage collective bargaining, and to curtail certain private sector labor and management practices, which can harm the general welfare of workers, businesses, and the U.S. economy.