An upward sloping yield curve means that
A)long-term bonds are a better investment than short-term bonds.
B)deflation is expected in the future.
C)short-term interest rates are more volatile than long-term interest rates.
D)none of the above.

Question

Quizplus · Accepted Answer

An upward sloping yield curve typically indicates that investors expect higher interest rates (or inflation) in the future, not necessarily that long-term bonds are a better investment, that deflation is expected, or that short-term rates are more volatile than long-term rates.

An Upward Sloping Yield Curve Means That