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valputin valputin
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8 years ago
If the yield curve slope is flat for short maturities and then slopes steeply upward for longer maturities, the liquidity premium theory (assuming a mild preference for shorter-term bonds) 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) a decline in short-term interest rates in the near future and a rise further out in the future.
C) constant short-term interest rates in the near future and a decline further out in the future.
D) constant short-term interest rates in the near future and further out in the future.
Textbook 
The Economics of Money, Banking and Financial Markets, Business School Edition

The Economics of Money, Banking and Financial Markets, Business School Edition


Edition: 4th
Author:
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Our course uses > The Economics of Money, Banking and Financial Markets
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MeelaMeela
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8 years ago
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valputin Author
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#2
8 years ago
Thank you
Our course uses > The Economics of Money, Banking and Financial Markets
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#3
8 years ago
@valputin,

Happy to help Slight Smile
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