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The Term Structure of Interest Rates or the Yield Curve

Question 40

Multiple Choice

The term structure of interest rates or the yield curve:


A) is normal when short-term rates are higher than long-term rates.
B) is inverted when short-term rates are lower than long-term rates.
C) shows the yield to maturity for securities of equal risk over time.
D) is always flat in the short-term.

Correct Answer:

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