What describes a normal yield curve?

A: Upward sloping.

A. Answer A is correct. A normal yield curve is one in which short-term rates are lower than intermediate-term rates which are lower than long-term rates. Therefore, the curve is upward sloping. B. Answer B is incorrect. A downward sloping curve is an inverted yield curve. C. Answer C is incorrect. A flat yield curve is one in which all term rates are equal. This is not the normal situation. D. Answer D is incorrect. A humped yield curve is one in which short-term rates are lower than intermediate-term rates which are higher than long-term rates. This situation is not normal.