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Homework answers / question archive / The theory that the yield curve reflects investor expectations about future interest rates; an expectation of rising interest rates results in an upward-sloping yield curve, and an expectation of declining rates results in a downward-sloping yield curve

The theory that the yield curve reflects investor expectations about future interest rates; an expectation of rising interest rates results in an upward-sloping yield curve, and an expectation of declining rates results in a downward-sloping yield curve. This is called:

Select one: a. Market segmentation theory b. Liquidity preference theory c. Expectations theory and Liquidity preference theory d. Expectations theory

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