Use the table for the question(s) below.
Suppose the term structure of interest rates is shown below:

-What is the shape of the yield curve and what expectations are investors likely to have about future interest rates?
A) inverted; higher
B) normal; higher
C) inverted; lower
D) normal; lower

Question

Use the table for the question(s) below.
Suppose the term structure of interest rates is shown below:
 
-What is the shape of the yield curve and what expectations are investors likely to have about future interest rates?
A) inverted; higher 
B) normal; higher 
C) inverted; lower 
D) normal; lower

Quizplus · Accepted Answer

An inverted yield curve occurs when long-term debt instruments have a lower yield than short-term debt instruments, which often signals that investors expect future interest rates to be lower.

Use the Table for the Question(s) Below