- This topic has 3 replies, 2 voices, and was last updated 6 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
Viewing 4 posts - 1 through 4 (of 4 total)
- You must be logged in to reply to this topic.
Specially for OpenTuition students: 20% off BPP Books for ACCA & CIMA exams – Get your BPP Discount Code >>
Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › short term interest rate
Dear John, why this sentence means upward sloping yeild curve “The central bank has lowered short term interest rates on a temporary basis to stimulate the economy”, based on the expectation theory, where the interest rate are expected to rise, then the yield curve will slop upward and vice versa.
many thanks
If the short term interest rate is lower on a temporary basis, then we will expect interest rates to rise in the future.
If interest rates are rising in the future then the yield curve will slop upwards.
thank you Sir
You are welcome 🙂