Multiple Choice
Using the pure expectations theory of term structure, a positively sloped yield curve indicates that investors expect
A) short term interest rates to fall.
B) short term interest rates to rise.
C) falling long term interest rates.
D) rising long term interest rates.
Correct Answer:

Verified
Correct Answer:
Verified
Q17: When interest rates are relatively low, investors
Q18: One-year securities are currently yielding 8 percent.
Q19: When interest rates are relatively high, investors
Q20: In the long run, the yield curve
Q21: According to the pure expectations approach to
Q23: If the following securities are of equal
Q24: According to the expectations theory of term
Q25: A negatively sloped yield curve indicates that
Q26: Investors usually _, because long-term securities have
Q27: When yields are expected to _ in