The Zero Curve Is Downward Sloping

question 3

Multiple Choice

The zero curve is downward sloping.Define X as the 1-year par yield,Y as the 1-year zero rate and Z as the forward rate for the period between 1 and 1.5 year.Which of the following is true?

• A) X is less than Y which is less than Z
• B) Y is less than X which is less than Z
• C) X is less than Z which is less than Y
• D) Z is less than Y which is less than X