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03% 23. If the Federal Reserve surprises investors by announcing an easing of monetary policy 0 we should expect the yield cu
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Answer #1

FED gives surprize by easing monetary policy that is in the short run interest rate will be decreased. So an investor should receive higher remuneration in the by lending money in longer period compare to short period. Because in the short run interest rate is decreased. So the yield cure will be steepen. The first option is correct

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