The existence of an upward-sloping yield curve suggests that:
A) bonds should be selling at a discount to par value.
B) bonds will not return as much as common stocks.
C) interest rates will be increasing in the future.
D)real interest rates will be increasing soon.

Question

Quizplus · Accepted Answer

An upward-sloping yield curve indicates that long-term interest rates are higher than short-term interest rates, suggesting that interest rates will increase in the future. This can happen due to various economic factors such as inflation expectations, economic growth, and monetary policy. Therefore, the best option is C.

The Existence of an Upward-Sloping Yield Curve Suggests That