Which one of the following statements about the term structure of interest rates is true?

a. The expectations hypothesis predicts a flat yield curve if anticipated future short-term rates exceed current short-term rates.

b. The expectations hypothesis contends that the long-term spot rate is equal to the anticipated short-term rate.

c. The liquidity premium theory indicates that, all else being equal, longer maturity bonds will have lower yields.

d. The liquidity preference theory contends that lenders prefer to buy securities at the short end of the yield curve. P-639