If the yield curve slope is flat, the liquidity premium theory indicates that the market is predicting

If the yield curve slope is flat, the liquidity premium theory indicates that the market is predicting



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


Answer: C) a mild decline in short-term interest rates in the near future and a continuing mild decline further out in the future.


Learn More :

Marketing Chapter 5

Learn More Multiple Choice Question :