Examination of the yield curve indicates
A) that short-term nominal interest rates are usually higher than long-term nominal interest rates.
B) that the expected profitability of short-term investment projects is usually higher than the expected . profitability of long-term investment projects.
C) that short-term nominal interest rates are usually lower than long-term nominal interest rates.
D) that the expected rate of return on short-term stocks is usually lower than the expected rate of return on long-term stocks.

Question

Quizplus · Accepted Answer

The yield curve typically slopes upwards, indicating that long-term nominal interest rates are usually higher than short-term nominal interest rates. This reflects the higher risk and inflation expectations over longer periods.

Examination of the Yield Curve Indicates