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The expectations hypothesis of the term structure, but not the liquidity premium hypothesis, suggests that Answer a. the yield curve is sometimes downward sloping b.
The expectations hypothesis of the term structure, but not the liquidity premium hypothesis, suggests that Answer a. the yield curve is sometimes downward sloping b. investors require a risk premium to induce them to hold long term bonds c. the yield curve is always upward sloping d. the yield slopes up steeply prior to recessions
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