2. Given a flat yield curve, the liquidity premium theory argues that the market is predicting ____

A) A mild rise in short-term interest rates in the near future, and a mild decline further out in the future

B) Constant short-term interest rates in the near future and further out in the future

C) A mild decline in short-term interest rates in the near future, and a continuing mild decline further out in the future

D) Constant short-term interest rates in the near future, and a mild decline further out in the future