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Determine how expectations hypothesis is best explanation

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If the yield curve is positively sloped when averaged for long periods of time, this implies that

Question a. The expectations hypothesis is the best explanation of this phenomenonb. Inflation dominates the yield curvec. The liquidity (term) premium hypothesis is the best explanation of this phenomenond. Yield curves cannot be positively sloped over long periods of time

Reference no: EM132471603

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