Under the preferred habitat theory, the expectation that future short-term rates will be constant results in a yield curve that
A)is flat.
B)slopes upward.
C)slopes downward.
D)is flat, slopes upward, or slopes downward, depending on the size of the term premium at each maturity.

Question

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The Answer of Under the preferred habitat theory, the expectation that future short-term rates will be constant results in a yield curve that
A)is flat.
B)slopes upward.
C)slopes downward.
D)is flat, slopes upward, or slopes downward, depending on the size of the term premium at each maturity.

Under the Preferred Habitat Theory, the Expectation That Future Short-Term