Answer to Question #181798 in Finance for tanvia

Question

If yield curves, on average, were upward slopping, what would this say about the liquidity (term) premiums in the term structure? Would you be willing to accept the expectations theory? Why or Why not?

Answer 1

The yield curve is normally upward sloping because the maturity risk premium is normally positive.

Yes since it gives a fair understanding of the interest rates to the investors willing to invest in any type of bonds, short term or long term.