Question
What does historical data suggest about the nature of short-term and long-term interest rates?
Multiple choice question.
Short-term rates are always higher than long-term rates.
Long-term rates are always higher than short-term rates.
Sometimes short-term rates are higher and sometimes long-term rates are higher.
Short-term rates are equal to the long-term rates.
Multiple choice question.
Short-term rates are always higher than long-term rates.
Long-term rates are always higher than short-term rates.
Sometimes short-term rates are higher and sometimes long-term rates are higher.
Short-term rates are equal to the long-term rates.
Answers
GPT-4o mini
The correct answer is:
**Sometimes short-term rates are higher and sometimes long-term rates are higher.**
Historically, the relationship between short-term and long-term interest rates can vary depending on economic conditions, monetary policy, and investor expectations. Typically, long-term rates are higher than short-term rates in a normal yield curve scenario, but there are instances (such as during a yield curve inversion) where short-term rates can be higher than long-term rates.
**Sometimes short-term rates are higher and sometimes long-term rates are higher.**
Historically, the relationship between short-term and long-term interest rates can vary depending on economic conditions, monetary policy, and investor expectations. Typically, long-term rates are higher than short-term rates in a normal yield curve scenario, but there are instances (such as during a yield curve inversion) where short-term rates can be higher than long-term rates.