Which of the following statements is FALSE?
A)An inverted yield curve generally signals an expected decline in future interest rates.
B)An inverted yield curve is often interpreted as a positive forecast for economic growth.
C)All the formulas for computing present values of annuities and perpetuities are based upon discounting all of the cash flows at the same rate.
D)The rate of growth of your purchasing power is determined by the real interest rate.

Question

Quizplus · Accepted Answer

An inverted yield curve is actually interpreted as a negative forecast for economic growth, as it suggests that investors have low confidence in the future and are seeking safer, long-term investments.

Which of the Following Statements Is FALSE