单选题 The liquidity preference theory holds that: A. rational investors should show no preferences for either short- or long-term debt securities. B. the yield curve should be upward-sloping. C. cash should be preferred to Treasury securities because it is more liquid.

【正确答案】 B

【答案解析】The liquidity preference theory definitely has an upward-sloping bias with regard to the shape of the yield curve. That is because it holds that investors generally prefer the greater liquidity and reduced risk that accompanies short-term securities and, as a result, require a premium (higher yields) to get them to invest in longer-term securities.