Term: 1 year 2 years 3 years 5 years 10 years 20 years Rate: 5.00% 5.20% 5.40% 5.50% 5.76% 5.9%
Given the above term structure of interest rates, which of the following is most likely in the future?
Option I. Interest rates will fall.
Option II. Economic growth will slow.
Option III. Long-term rates will rise relative to short term rates.

Question

Quizplus · Accepted Answer

The Answer of Term: 1 year 2 years 3 years 5 years 10 years 20 years Rate: 5.00% 5.20% 5.40% 5.50% 5.76% 5.9%
Given the above term structure of interest rates, which of the following is most likely in the future?
Option I. Interest rates will fall.
Option II. Economic growth will slow.
Option III. Long-term rates will rise relative to short term rates.

Term: 1 Year 2 Years 3 Years 5 Years 10