Which of the following DOES NOT correctly describe how the various theories of the term structure of interest rates explain a "flat" yield curve?
A. Segmented markets theory: Investors prefer long-term to short-term bonds.
B. Liquidity premium theory: The liquidity premium on medium- and long-term bonds equals zero and expected future short-term rates are constant.
C. Expectations theory: Interest rates are expected to remain steady in the future.
D. Expectations theory: Interest rates are equally likely to fall or rise in the future.
E. Preferred habitat theory: Interest rates are expected to fall moderately in the future