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 may 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. This suggests that market participants expect interest rates to rise in the future, which leads to the higher long-term rates.

The Existence of an Upward-Sloping Yield Curve Suggests That