Multiple Choice
Assume that a yield curve is influenced by interest rate expectations and a liquidity premium. Assume the yield curve is initially flat. If liquidity suddenly was no longer important, the yield curve would now have a ____ (assuming no other changes) .
A) slight downward slope
B) slight upward slope
C) steep upward slope
D) steep downward slope
Correct Answer:
Verified
Correct Answer:
Verified
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