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    Exam 5: The Risk Structure and Term Structure of Interest Rates
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    According to the Liquidity Premium Theory,if Market Participants Expect That
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According to the Liquidity Premium Theory,if Market Participants Expect That

Question 53

Question 53

Multiple Choice

According to the liquidity premium theory,if market participants expect that inflation in the future will be lower than it currently is,the yield curve will


A) slope upward.
B) be flat.
C) be inverted.
D) be vertical.

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