Which of the Following Statements Is CORRECT

question 51

Multiple Choice

Which of the following statements is CORRECT?

• A) If the maturity risk premium (MRP)is greater than zero,the Treasury bond yield curve must be upward sloping.
• B) If the maturity risk premium (MRP)equals zero,the Treasury bond yield curve must be flat.
• C) If inflation is expected to increase in the future and the maturity risk premium (MRP)is greater than zero,the Treasury bond yield curve must be upward sloping.
• D) If the expectations theory holds,the Treasury bond yield curve will never be downward sloping.
• E) 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.

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Definitions:

U.S. Army Corps

A federal organization responsible for public engineering, design, and construction management, including improvements to natural resources and infrastructure.

Wetlands

Areas of land designated by government agencies as protected areas that support wildlife and that therefore cannot be filled in or dredged by private parties.

Clean Water Act

United States federal law aimed at reducing pollution and protecting the nation’s waterways.

Discharge of Pollutants

The release of pollutants into the environment, often regulated by laws to prevent harm.