koba

i dont get it...why would it decrease??

If investors require a liquidy premium on top of pure expectations theory...shouldnt the yeild curve be upward sloping??


markCFAIL Wrote:
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> Agreed, i actually remember this question with
> detail because i wrote a message next to it in the
> booklet to the institute saying "the answer is
> appropriately b but it's a crap question because
> if the liquidity preference is given an arbitrary
> value of zero it could be flat or decrease".