Question

Which selection below, best explains why yield curves are almost never flat, but rather have an...

Which selection below, best explains why yield curves are almost never flat, but rather have an upward slope? This selection also is associated with the term structure of interest rates.

Group of answer choices:

Expectations theory

Segmented markets theory

Theory of quantum mechanics

Liquidity premium theory

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Answer #1

Expectations theory

Explanation: The expectations theory states that investors are biased towards investing in short-term bonds.

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