Discover the answers you need at Westonci.ca, where experts provide clear and concise information on various topics. Explore thousands of questions and answers from a knowledgeable community of experts ready to help you find solutions. Explore comprehensive solutions to your questions from a wide range of professionals on our user-friendly platform.
Sagot :
According to the liquidity premium theory of the term structure, a flat yield curve indicates that short-term interest rates are expected to remain constant.
What does a flat yield curve mean?
A flat yield curve is an indicator that interest rate would be constant. The long term and short term interest rate would be the same. A downward sloping yield curve can also be an indicator that there is an expectation of lower inflation rate in coming years.
If the yield curve is upward sloping, the short term interest rate would be lower than the long term interest rate
To learn more about bonds, please check: https://brainly.com/question/9970004
We hope this information was helpful. Feel free to return anytime for more answers to your questions and concerns. Thank you for your visit. We're committed to providing you with the best information available. Return anytime for more. We're here to help at Westonci.ca. Keep visiting for the best answers to your questions.
