If the interest rate on a 2-year bond is higher than the interest rate on a 10-year bond, then:

Question 4 options: the yield curve is sloping down

the yield curve is flat

this is not enough information to decide the slope of the yield curve t

he yield curve is sloping up

If 1-year interest rates for the next three years are expected to be 1, 1, and 1 percent, and the 3-year liquidity premium (or term premium) is 1 percent, then the 3-year bond rate will be

Question 6 options:

A)	1 percent.

B)	2 percent.

C)	3 percent.

D)	4 percent.

An inverted yield curve could mean that people expect: (Mark ALL that are relevant below)

Question 8 options:

a)	higher inflation in the future.

b)	lower inflation in the future.

c)	a recession in the future.

d)	an economic expansion in the future.