Using the expectations theory of term structure,a positively sloped yield curve indicates that investors expect:
A) falling long-term interest rates.
B) rising long-term interest rates.
C) short-term interest rates to be lower in the near future.
D) short-term interest rates to be higher in the near future.

Question

Quizplus · Accepted Answer

According to the expectations theory, a positively sloped yield curve suggests that investors expect short-term interest rates to rise in the future.

Using the Expectations Theory of Term Structure,a Positively Sloped Yield