Question: (a) (b) Using the three graphs in the above figure, which yield curve shapes are consistent with the liquidity premium theory of the term structure

(a) (b) Using the three graphs in the above figure, which yield curve shapes are consistent with the liquidity premium theory of the term structure of interest rates when viewed in isolation? (a), (b) and (c) (b) and (c) only (a) only (c) only All of the above are consistent with the liquidity premium theory in isolation

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