At any time,the shape and slope of the yield curve is affected by:
A) the demand and supply conditions in the various segments of the market.
B) inflationary expectations.
C) liquidity preferences.
D) All of the given choices.

Question

Quizplus · Accepted Answer

All the given choices affect the shape and slope of the yield curve. The demand and supply conditions in various segments of the market influence the yields of different bonds, inflationary expectations affect the level of interest rates, and liquidity preferences impact the supply and demand of bonds. Therefore, all of these factors contribute to the shape and slope of the yield curve.

At Any Time,the Shape and Slope of the Yield Curve