Which of the Following Statements Is Most Correct? Other Things

question 36

Multiple Choice

Which of the following statements is most correct? Other things held constant,

• A) the "liquidity preference theory" would generally lead to an upward sloping yield curve.
• B) the "market segmentation theory" would generally lead to an upward sloping yield curve.
• C) the "expectations theory" would generally lead to an upward sloping yield curve.
• D) the yield curve under "normal" conditions should be horizontal (i.e. ,flat. )
• E) a downward sloping yield curve would suggest that investors expect interest rates to increase in the future.

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Definitions:

Express Agency

An agency relationship formed by explicit oral or written agreement between the agent and the principal.

Implied Agency

A situation where an agency relationship is inferred from the actions of the parties rather than an explicit agreement.

Constructive Trust

A legal remedy imposed by a court to rectify situations where someone wrongfully holds property they should not benefit from.

Legal Right

A claim recognized and delimited by law for the purpose of securing it.