The Yield on a 30-Year U

question 17

Multiple Choice

The yield on a 30-year U.S. Treasury security is 6.5%; the yield on a 2-year U.S. Treasury bond is 4.0%. This data indicate:

• A) the yield curve is downward sloping.
• B) the yield curve is flat since the risk premium needs to be added for longer maturities.
• C) the yield curve is upward sloping.
• D) that people expect inflation to decrease in the future.

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