If the yield curve is upward sloping and expectations theory indicates that the expected 1 year rate in 2 years time is 5%, liquidity preference theory would indicate that

Select one:

a.

the expected 1 year rate in 2 years time is equal to 5%

b.

the expected 1 year rate in 2 years time is greater than 5%

c.

the expected 1 year rate in 2 years time is less than 5%

d.

expectations theory provides no useful insights into the 1 year rate in 2 years time