According to segmented markets theory, if investors have mostly long-term funds available and borrowers want short-term funds, this will place ____ pressure on the demand for short-term funds by borrowers and the yield curve will be ____ sloping.
A)upward; downward
B)downward; upward
C)upward; upward
D)downward; downward

Question

Quizplus · Accepted Answer

If investors have mostly long-term funds available and borrowers want short-term funds, this will place upward pressure on the demand for short-term funds by borrowers. As a result, the yield curve will be upward sloping.

According to Segmented Markets Theory, If Investors Have Mostly Long-Term