Any theory of the yield curve must be able to explain what three general conditions?

What will be an ideal response?


#1) The interest rates of different maturities will move together; #2) Yields on short-term bonds will be more volatile than yields on long-term bonds; and #3) Long-term yields are usually higher than short-term yields, (the yield curve usually slopes upward).

Economics

You might also like to view...

All of the following generate positive externalities EXCEPT

A) public health programs. B) lower marginal tax rates. C) requiring proof of inoculation before entering college. D) requiring proof of inoculation before entering elementary school.

Economics

A good that is most likely to be in the producer price index is:

A. industrial machinery. B. SUV. C. spaghetti. D. All of these are in the PPI.

Economics

Which of the following is an example of a regulatory action?

a. Drivers who exceed the speed limit will pay a fine if caught. b. Automobile manufacturers are required to include built-in infant seats. c. Two firms receive $100,000 fines for engaging in a price-fixing agreement. d. A junk mail solicitor is taken to jail for mail fraud. e. The tobacco industry is required to pay for the hospital bills of a lifelong smoker who develops cancer.

Economics

In a free market for rental housing, the average rental rate

A. includes a large amount of economic rent. B. includes zero economic rent. C. is entirely economic rent, since rental housing is fixed in supply. D. includes some economic rent.

Economics