The Yield on a Thirty-Year Treasury Bond Is 8% at the Same

question 30

Multiple Choice

The yield on a thirty-year Treasury bond is 8% at the same time as the yield on two-year Treasury note is 5%. This occurrence

• A)indicates that the yield curve is downward sloping.
• B)is well explained by the segmented markets theory.
• C)is largely explained by the favorable tax treatment of Treasury notes.
• D)indicates that the bond market is anticipating that inflation will fall.

---

Definitions:

Scarce Resources

Goods or services that are limited in availability relative to the desires or needs of individuals or systems.

Competition

A situation where two or more parties strive for a goal that cannot be shared, such as a higher rank or prize.

Arteries Constricting

Arteries constricting refers to the narrowing of the arteries, which can reduce blood flow and increase blood pressure.

Heart Rate

The number of heartbeats per unit of time, typically expressed as beats per minute (bpm).