Which of the Following Statements Is Most Correct? Other Things

Multiple Choice

Which of the following statements is most correct? Other things held constant.

A) the "liquidity preference theory" would generally lead to an upward sloping yield curve.
B) the "market segmentation theory" would generally lead to an upward sloping yield curve.
C) the "expectations theory" would generally lead to an upward sloping yield curve.
D) the yield curve under "normal" conditions would be horizontal (i.e., flat) .
E) a downward sloping yield curve would suggest that investors expect interest rates to increase in the future.