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Which One of the Following Statements Is True

Question 38

Multiple Choice

Which one of the following statements is true?


A) The expectations hypothesis indicates a flat yield curve if anticipated future short-term rates exceed the current short-term rate.
B) The basic conclusion of the expectations hypothesis is that the long-term rate is equal to the anticipated long-term rate.
C) The liquidity preference hypothesis indicates that,all other things being equal,longer maturities will have lower yields.
D) The segmentation hypothesis contends that borrows and lenders are constrained to particular segments of the yield curve.
E) None of these.

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