Suppose the term structure of interest rates is shown below:

Term	1 year	2 years	3 years	5 years	10 years	20 years
Rate (EAR%)	5.00%	4.80%	4.60%	4.50%	4.25%	4.15%

What is the shape of the yield curve and what expectations are investors likely to have about future interest rates?

A.

inverted; lower

B.

normal; higher

C.

inverted; higher

D.

normal; lower