Suppose the yield curve is upward sloping, but that expected future short-term rates are constant.

Suppose the yield curve is upward sloping, but that expected future short-term rates are
constant. This may be because


A) compounding results in non-linear effects which increase long-term yields
B) bondholders prefer to hold short-term bonds for liquidity reasons
C) bondholders prefer to hold long-term bonds for liquidity reasons
D) markets are irrational
E) none of the above