An Upward-Sloping Term Structure of Interest Rates Indicates

question 118

Multiple Choice

An upward-sloping term structure of interest rates indicates:

• A)the real rate of return is lower for short-term bonds than for long-term bonds.
• B)there is an indirect relationship between real interest rates and time to maturity.
• C)there is an indirect relationship between nominal interest rates and time to maturity.
• D)the nominal rate is declining as the real rate rises as the time to maturity increases.
• E)the nominal rate is increasing even though the real rate is constant as the time to maturity increases.