Under the liquidity premium theory a flat yield curve implies:
A) there is no risk premium for longer-term maturities.
B) short-term interest rates are expected to remain constant.
C) short-term interest rates are expected to decrease.
D) long-term interest rates are higher than short-term interest rates.

Question

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The Answer of Under the liquidity premium theory a flat yield curve implies:
A) there is no risk premium for longer-term maturities.
B) short-term interest rates are expected to remain constant.
C) short-term interest rates are expected to decrease.
D) long-term interest rates are higher than short-term interest rates.

Under the Liquidity Premium Theory a Flat Yield Curve Implies