If the Yield Curve Has a Mild Upward Slope,the Liquidity

Multiple Choice

If the yield curve has a mild upward slope,the liquidity premium theory 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) constant short-term interest rates in the near future and further out in the future.
C) a decline in short-term interest rates in the near future and a rise further out in the future.
D) a decline in short-term interest rates in the near future and an even steeper decline further out in the future.