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Suppose the liquidity preference theory holds. Which of the following is true? A. An upward-sloping yield curve implies that the market is expecting future spot
Suppose the liquidity preference theory holds. Which of the following is true? A. An upward-sloping yield curve implies that the market is expecting future spot rates (6-month rates) to be higher than the current spot rate. B. A downward-sloping yield curve implies that the market is expecting future spot rates (6-month rates) to be lower than the current spot rate. C. A flat yield curve implies that the market is expecting future spot rates (6-month rates) to be the same as the current spot rate. D. All are true. E. None are true
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