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Suppose the liquidity preference theory of the term structure of interest rates holds. If the investors expect future short-term rates to stay at the current

Suppose the liquidity preference theory of the term structure of interest rates holds. If the investors expect future short-term rates to stay at the current level, the yield curve is

A.

upward sloping.

B.

downward sloping.

C.

flat.

D.

hump-shaped.

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