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Question
According to the expectations theory of the term structure,A)yield curves should be equally likely to slope downward as to slope upward.
B)when the yield curve is steeply upward-sloping, short-term interest rates are expected to rise in the future.
C)when the yield curve is downward-sloping, short-term interest rates are expected to remain relatively stable in the future.
D)all of the above.
E)only A and B of the above.
Answer
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