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Question
What does an upward-sloping yield curve imply, according to the expectations theory of the term structure of interest rates?a. Investors expect long-term interest rates to fall in the future.
b. Investors expect future short-term interest rates to be lower than the current short-term interest rate.
c. Investors expect future short-term interest rates to be the same as the current short-term interest rate.
d. Investors expect future short-term interest rates to be higher than the current short-term interest rate.
Answer
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