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    Money the Financial System
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    Exam 7: Risk Structure and Term Structure of Interest Rates
  5. Question
    Under the Preferred Habitat Theory, a Flat Yield Curve Indicates
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Under the Preferred Habitat Theory, a Flat Yield Curve Indicates

Question 9

Question 9

Multiple Choice

Under the preferred habitat theory, a flat yield curve indicates that investors expect future short-term rates to


A) fall.
B) rise.
C) remain constant.
D) either fall or remain constant.

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