22. If the expectations theory of the term structure of interest rates is correct, and if the other term structure theories are invalid, and we observe a downward sloping yield curve, which of the following is a true statement? a.Investors expect short-term rates to be constant over time. b.Investors expect short-term rates to increase in the future. c.Investors expect short-term rates to decrease in the future. d.It is impossible to say unless we know whether investors require a positive or negative maturity risk premium. e.The maturity risk premium must be positive 23. Other things held constant, which of the following will not affect the quick ratio? (Assume that current assets equal current liabilities.) a.Fixed assets are sold for cash. b.Cash is used to purchase inventories. c.Cash is used to pay off accounts payable. d.Accounts receivable are collected. e.Long-term debt is issued to pay off a short-term bank loan.
22. If the expectations theory of the term structure of interest rates is correct, and if the other
term structure theories are invalid, and we observe a downward sloping yield curve, which of
the following is a true statement?
a.Investors expect short-term rates to be constant over time.
b.Investors expect short-term rates to increase in the future.
c.Investors expect short-term rates to decrease in the future.
d.It is impossible to say unless we know whether investors require a positive or
negative maturity risk premium.
e.The maturity risk premium must be positive
23. Other things held constant, which of the following will not affect the quick ratio? (Assume
that current assets equal current liabilities.)
a.Fixed assets are sold for cash.
b.Cash is used to purchase inventories.
c.Cash is used to pay off accounts payable.
d.Accounts receivable are collected.
e.Long-term debt is issued to pay off a short-term bank loan.
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