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2. Suppose that some event occurs which has no effect on expected interest rates but increases uncertainty about interest rates. What happens to the yield

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2. Suppose that some event occurs which has no effect on expected interest rates but increases uncertainty about interest rates. What happens to the yield curve in this situation? EXPLAIN CAREFULLY! (Hint: Which theory of the term structure of interest rates is applicable here, the expectations theory or the preferred habitat theory? Why?)

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