According to the expectations theory of the term structure,

According to the expectations theory of the term structure,



A) yield curves should be equally likely to slope downward as to slope upward.
B) when the yield curve is steeply upward-sloping, short-term interest rates are expected to rise in the future.
C) when the yield curve is downward-sloping, short-term interest rates are expected to remain relatively stable in the future.
D) all of the above.
E) only A and B of the above.

Answer: E) only A and B of the above.


Learn More :

Marketing Chapter 5

Learn More Multiple Choice Question :