Asked by
Kiyana Monae’
on Nov 04, 2024
Verified
An inverted yield curve implies that
A) long-term interest rates are lower than short-term interest rates.
B) long-term interest rates are higher than short-term interest rates.
C) long-term interest rates are the same as short-term interest rates.
D) intermediate-term interest rates are higher than either short- or long-term interest rates.
E) None of the options are correct.
Inverted Yield Curve
A situation in the bond market where long-term debt instruments have a lower yield than short-term debt instruments, often seen as an indicator of economic recession.
Long-term Interest Rates
Interest rates applied to loans or debt securities with longer maturity dates, generally over ten years.
- Analyze yield curves to deduce their implications on forthcoming interest rates and economic prospects.
Verified Answer
DD
Learning Objectives
- Analyze yield curves to deduce their implications on forthcoming interest rates and economic prospects.