Multiple Choice
According to the expectations theory, if next year's expected short-term rate is below the current short-term rate,
A) the current long-term rate will be below the current short-term rate.
B) the current long-term rate will be above the current long-term rate.
C) the current long-term rate will be horizontal.
D) the current long-term rate will be vertical.
Correct Answer:
Verified
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