Which of the following statements is/are INCORRECT?

a.

(1): The expectations theory states that if the rate of return on a two-year investment is the same as that on the two one-year consecutive investment covering the same period, investors will be indifferent between these two investment options.

b.

(2): We could observe an upward sloping yield curve when the yield curve based on expectations is downward sloping.

c.

(3): The addition of the liquidity premium causes the yield curve to shift upward parallelly.

d.

(1) and (3).

e.

(2) and (3).