Easy, quick multiple choice questions. I always rate!

13.) According to the liquidity premium theory of the term structure

a.) Because buyers of bonds may prefer binds of one maturity over another, interest rates on bonds of different maturities do not move together over time.

b.) The interest rate on long-term bonds will equal an average of short-term interest rates that people expect to occur over the life of the long-term bonds plus a term premium.

c.) because of the positive term premium, the yield curve will not be observed to be downward sloping.

d.) the interest rate for each maturity bond is determined by supply and demand for that maturity bond.

14.) According to the liquidity premium theory of the term structure, a steeply upward sloping yield curve indicates that short-term interest rates are expected to

a.) rise in the future

b.) remain unchanged in the future

c.) decline moderately in the future

d.) decline sharply in the future

15.) The preferred habitat theory of the term structure is closely related to the

a.) expectations theory of the term structure

b.) segmented markets theory of the term structure

c.) liquidity premium theory of the term structure

d.) the inverted yield curve theory of the term structure.

16.) An inverted yield curve predicts that short-term interest rates

a.) are expected to rise in the future

b.) will rise and then fall in the future

c.) will remain unchanged in the future

d.) will fall in the future