Which of the Following Statements Is CORRECT

question 81

Multiple Choice

Which of the following statements is CORRECT?

• A) If inflation is expected to increase in the future,and if the maturity risk premium (MRP)is greater than zero,then the Treasury yield curve will have an upward slope.
• B) If the maturity risk premium (MRP)is greater than zero,then the yield curve must have an upward slope.
• C) Because long-term bonds are riskier than short-term bonds,yields on long-term Treasury bonds will always be higher than yields on short-term T-bonds.
• D) If the maturity risk premium (MRP)equals zero,the yield curve must be flat.
• E) The yield curve can never be downward sloping.

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Definitions:

Creativity

The ability to produce original and valuable ideas or solutions by thinking beyond traditional frameworks or exploring new perspectives.

Improvisation

The act of creating or performing something spontaneously or without preparation.

Spontaneous

Occurring without external cause, force, or planning; arising naturally or impulsively.

Imaginative

Characterized by the ability to think of new and original ideas or concepts beyond conventional patterns.