Under the expectations theory, an upward-sloping yield curve indicates that investors expect future short-term rates to
A)fall.
B)rise.
C)remain constant.
D)either rise or remain constant.

Question

Quizplus · Accepted Answer

An upward-sloping yield curve means that long-term rates are higher than short-term rates, which suggests that investors expect short-term rates to rise in the future.

Under the Expectations Theory, an Upward-Sloping Yield Curve Indicates That