Which Statement About Interest Rates Is True

Multiple Choice

Which statement about interest rates is true?

A) The prime rate equals the overnight rate plus 2 percent.
B) Long-run interest rates tend to be lower than short-run interest rates.
C) Short-run bonds tend to be riskier than long-run bonds.
D) Investors require a higher reward for bonds with more liquidity.
E) Long-run interest rates fluctuate more than short-run interest rates.