Which of the statements below best describes why a normal yield curve is positively sloped?
A) Investors logically demand higher returns from government securities than they do from corporate securities.
B) Short-term bonds generally fluctuate in price more than long-term bonds.
C) Stocks generally have lower yields than bonds, although their total returns may be higher.
D) Investors demand higher interest when lending their money for longer periods.
Answer: D) Investors demand higher interest when lending their money for longer periods.