A(n) ________ yield curve reflects lower expected future rates of interest.
A) upward-sloping
B) flat
C) downward-sloping
D) linear

Question

Quizplus · Accepted Answer

A downward-sloping yield curve is also known as an inverted yield curve and signifies an expectation of lower future interest rates. This is because investors are willing to accept lower yields on longer-term investments, indicating a belief that interest rates will continue to decline in the future.

A(n) ________ Yield Curve Reflects Lower Expected Future Rates of Interest