Multiple Choice
According to the liquidity preference hypothesis, yield curves generally slope upward because
A) investors prefer short maturity obligations to long maturity obligations.
B) investors prefer long maturity obligations to short maturity obligations.
C) investors prefer less volatile long maturity obligations.
D) investors prefer more volatile short maturity obligations.
E) None of these are correct.
Correct Answer:
Verified
Correct Answer:
Verified
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