If yields on one-year bonds are expected to fall and the liquidity premium increases with the time to maturity, the yield curve
A) will be upward sloping.
B) will be flat.
C) will be downward sloping.
D) cannot be determined.

Question

Quizplus · Accepted Answer

The Answer of If yields on one-year bonds are expected to fall and the liquidity premium increases with the time to maturity, the yield curve
A) will be upward sloping.
B) will be flat.
C) will be downward sloping.
D) cannot be determined.

If Yields on One-Year Bonds Are Expected to Fall and the Liquidity