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QUESTION 16 Suppose the Wall Street Journal in its today edition reported a yield curve more upward sloping than usual, this means that people are
QUESTION 16 Suppose the Wall Street Journal in its today edition reported a yield curve more upward sloping than usual, this means that people are expecting: an economic slowdown the U.S. Treasury may default on its obligations. the Federal Reserve is going to ease monetary policy. a future rise in short-term interest rates. QUESTION 17 An economist argues that bonds with different maturities are largely perfect substitutes. According to this economist, the must be equal. on these bonds expected return surprise return surplus return excess return QUESTION 18 Suppose you subscribe to the segmented market theory of the term structure. That means that you assurme that bonds of different maturities are not substitutes at all are perfect substitutes. are substitutes only if the investor is given a premium incentive. are substitutes but not perfect substitutes
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