单选题
If investors expect stable rates of inflation in the future, the pure expectations theory suggests that the yield curve now will be:
【正确答案】
A
【答案解析】The pure expectations theory explains the term structure in terms of expected future short-term interest rates. Assuming that interest rates reflect a relatively stable real rate of interest plus a premium for expected inflation, stability in inflation expectations would mean unchanged future short-term interest rates and a flat yield curve.