1. Term Structure The Philippines' slower than expected Gross Domestic Product (GDP) growth has resulted in a flattening of the yield curve. Investors are buying long-term bonds, which decreased its yield; thus, increasing bond prices. Short-term bonds, on the other hand, has remained the same. Questions: a. Why are bond investors buying the long-end more? Use the pure expectations theory in explaining your answer. Explanation: b. Although not all the time, why is flattening of the yield curve signifies a recession? Explanation