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The yield curve has a downward slope. According to the liquidity preference hypothesis A. long-term interest rates will rise B. short-term spot rates are expected

The yield curve has a downward slope. According to the liquidity preference hypothesis

  • A. long-term interest rates will rise

  • B. short-term spot rates are expected to rise

  • C. short-term spot rates are expected to fall by less than implied by the term structure.

  • D. short-term spot rates are expected to fall by more than implied by the term structure.

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