GARP 2016-FRR Exam - Topic 2 Question 16 Discussion

Actual exam question for GARP's 2016-FRR exam

Question #: 16
Topic #: 2

[All 2016-FRR Questions]

What is the explanation offered by the liquidity preference theory for the upward sloping yield curve shape?

AThe long term rates must rise enough to get some borrowers to borrow short-term and some lenders to lend long-term.

BThe long term rates must rise enough to get some borrowers to borrow long-term and some lenders to lend short-term.

CThe short term rates must rise enough to get some borrowers to borrow short-term and some lenders to lend long-term.

DThe short term rates must fall enough to get some borrowers to borrow long-term and some lenders to lend short-term.

Show Suggested Answer

Suggested Answer: B

by Alaine at Mar 03, 2026, 07:34 AM

Limited Time Offer

25%

Off

Contribute your Thoughts:

Submit Cancel

Currently there are no comments in this discussion, be the first to comment!