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.

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