An upward sloping yield curve indicates that security investors expect future interest rates to _____ and security prices to ______.
A) fall; fall.
B) fall; rise.
C) rise; fall.
D) rise; rise.

Question

Quizplus · Accepted Answer

An upward sloping yield curve suggests that investors expect future interest rates to rise. As interest rates rise, bond prices typically fall, hence security prices are expected to fall.

An Upward Sloping Yield Curve Indicates That Security Investors Expect