1. If the yield curve is perfectly flat, than according to the liquidity premium theory

   	a.	Future short-term interest rates are expected to decrease slightly
   	b.	Future short-term interest rates are expected to increase slightly
   	c.	Future short-term interest rates are expected to remain constant

   2.

   The expectations theory of the term structure of interest rates can explain all of the following except

   	a.	interest rates of different maturities usually movie together
   	b.	the yield curve is normally upward sloping
   	c.	short-term interest rates are more volatile than long-term interest rates
   	d.	The expectations theory can explain all of the above