Name D) are substitutes but not perfoct substitutes 23) According to the liquidity premium theory of the term structure A) bonds of different maturities are not substinunes B) if yield curves are dowawaad sloping, then shot-term interest rates are expected to fall by so mach that, even when the positive term premium is added, kong-temm rates fall below short-term rates C) yield curves should never slope downward. D) interest rates on bonds of different maturities do not move together over time downward. D) interest rates 24) According to the liquidity premium thecry of the tem structure, a flat yield curve indicates that short- term imerest rates are expected to A) rise in the future. B)renain unchanged inthe future. C) decline moderately in the future D) decline sharply in the future. Yiold to Maturty orm to Maturity 25) The ishaped yield curve in the figure above indicates that short-serm inlerest rates are expected to A) rise in the near-erm and fell Ister on. B) fal sharply in the sear-derm and rise later on C) fail moderalely in the nean-term and rise later on D) remain unchanged in the near-term and rise later on. later on. PART II (as) . IF 1- year inherest rates Sor the next three years are expected to be 4, 2, and 3 percent, and the J-yeur term premium is I peroent, what will be the 3-year bond rate