SIE Exam Practice Question 630

Question: 630

Which of the following is/are correct regarding a flat yield curve?

(1) It generally indicates an economic slowdown.

(2) It occurs when there is little difference between short-term and long-term yields for debt instruments of the same credit quality.

A. (1) only

B. (2) only

C. Both (1) and (2) are correct.

D. Neither (1) or (2) are correct.