If the yield curve has a steep upward slope, investors expect:

		interest rates to increase and inflation rates to decrease.
		interest rates to decrease and inflation rates to increase.
		interest rates to increase and inflation rates to increase.
		interest rates to decrease and inflation rates to decrease.

Based on which of the following term structure theories are forward rates most useful?

		Expectations theory
		Liquidity preference theory
		Preferred habitat theory
		Market segmentation theory