If the yield curve has a mild upward slope, the liquidity premium theory indicates that the market is predicting

If the yield curve has a mild upward slope, the liquidity premium theory indicates that the market is predicting



A) a rise in short-term interest rates in the near future and a decline further out in the future.
B) constant short-term interest rates in the near future and further out in the future.
C) a decline in short-term interest rates in the near future and a rise further out in the future.
D) a decline in short-term interest rates in the near future and an even steeper decline further out in the future.


Answer: B) constant short-term interest rates in the near future and further out in the future.


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Marketing Chapter 5

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