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Jennifer Lopez was looking to finance her next movie. She took a Financial Markets and Institutions course in UCLA and learned that the liquidity premium

Jennifer Lopez was looking to finance her next movie. She took a Financial Markets and Institutions course in UCLA and learned that the liquidity premium theory and the pure expectations theory are the influencers of the yield curve's shape. Jennifer realizes that, all else being equal, if the yield curve is initially flat and then liquidity becomes unimportant to market participants, it is expected that the yield curve would have a ____.
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slight downward slope
remain the same
slight upward slope
steep upward slope
None are correct

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