Investors can use publicly available financial data to determine which of the following?I) The shape of the yield curveII) Expected future short-term rates (if liquidity premiums are ignored)III) The direction the Dow indexes are headingIV) The actions to be taken by the Federal Reserve
A) I and II
B) I and III
C) I, II, and III
D) I, III, and IV
E) I, II, III, and IV

Question

Quizplus · Accepted Answer

I) The shape of the yield curve can be determined by looking at the interest rates across different maturities. II) Expected future short-term rates can be inferred from the current yield curve, assuming liquidity premiums are ignored, as the shape of the yield curve reflects market expectations about future interest rates. III and IV cannot be directly determined from publicly available financial data as they involve speculative forecasting and policy decisions by the Federal Reserve, respectively.

Investors Can Use Publicly Available Financial Data to Determine Which