Which of the following statements are correct?

(1) The general level of interest rates is affected by investors’ desire for a real return
(2) Market segmentation theory can explain kinks (discontinuities) in the yield curve
(3) When interest rates are expected to fall, the yield curve could be sloping downwards

A. 1 and 2 only
B. 1 and 3 only
C. 2 and 3 only
D. 1, 2 and 3