OODA Remaining Time: 37 minutes, 47 seconda Question Completion Status Qu Which of the following statements is correct? The expectations theory of the term structure of interest rates states that borrowers generally prefer to borrow on a long-term basis while savers generally prefer to lend on a short-term basin, and that as a result, the yield curve normally is upward sloping . It is theoretically possible for the yield curve to have a downward slope, and there have been times when such a slope existed. That situation was probably caused by investors' liquidity preferences, i.e., by the factors which undertie the liquidity preference theory Reinvestment rate risk is higher, other things held constant, on long-term than on short-term bonds. According to the market segmentation theory of the term structure of interest rates, we should normally expect the yield curve to slope downward If the yield on a 1-year T-bills is lower than the expected rate of inflation during the coming year, and if the maturity risk and liquidity premiums on 1-year T-bills are zero, then the real risk-free rate must be negative. MacBook Pro 5 0 7 E R w HT K J