SIE practice questionmediumYield Curves
An inverted yield curve typically predicts:
- AStable inflation
- BRapid economic expansion
- CA potential economic recession✓ Correct answer
- DA bull market in equities
Explanation
Why C — A potential economic recession
An inverted yield curve (short-term rates higher than long-term) often signals forthcoming recession. Expansion and bull markets are not typically predicted; inflation is not directly related.
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