When the yield curve is flat, this means which of the following?
A)Short-term securities yield more than long-term securities.
B)Short-term securities yield less than long-term securities.
C)Short-term securities yield the same as long-term securities.
D)None of the above is correct.

Question

Quizplus · Accepted Answer

When the yield curve is flat, it means that short-term securities yield the same as long-term securities. This occurs when the market perceives little difference in risk between short-term and long-term investments, and may indicate expectations of lower economic growth and inflation in the future.

When the Yield Curve Is Flat, This Means Which of the Following