If short-term interest rates are expected to fall, the yield curve Select one: a. slopes upward. O b. slopes downward. c. is vertical d. is horizontal. Over one year, future value or cash flow (CF), present value (PV), and the rate of interest (i) are related as follows Select one: O a. PV = CF (1+i). O b. CF = PV / (1+i). C. CF + PV = 1/(1+i). O d. CF/PV = (1+i). The efficient market hypothesis suggests that stock prices tend to follow a "random walk." Thus, the best strategy for investing is Select one: O O a. a "buy and hold strategy" of holding on to stock until you badly need the money. b. turning over your stock portfolio each week, selecting stocks by throwing darts at the stock page. c. a "churning strategy" of buying and selling often to catch the market swings. d. a "buy and hold strategy" of holding on to stocks to avoid brokerage commissions. O O According to the liquidity preference theory, short-run interest rates are determined by Select one: a. the stock of money demanded and supplied. b. the stock of bonds demanded and supplied. C. the stock of common shares demanded and supplied. d. all of these choices