The yield curve in a particular country is currently flat but recent news suggesting strong economic growth
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Question:
The yield curve in a particular country is currently flat but recent news suggesting strong economic growth ahead is raising expectations that the central bank will increase interest rates.
1(a) Explain how you would expect each of the following market participants to behave:
(i) Long-term bond investors
(ii) Bond speculators
(iii) Long-term bond issuers
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