A Normal Yield Curve That Is Upward Sloping Implies That

question 42

Multiple Choice

A normal yield curve that is upward sloping implies that:

• A)the returns on short-term securities are higher than the returns on long-term securities of similar risk.
• B)the returns on long-term securities are equal to the returns on short-term securities of similar risk.
• C)the returns on short-term securities are lower than the returns on long-term securities of similar risk.
• D)the returns on bonds with higher maturity risks are lower than the returns on bonds with lower maturity risks.
• E)the returns on bonds with a lower default risks are higher than the returns on bonds with higher default risks.

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Definitions:

Crisis

A critical or precarious situation that requires immediate attention and action to prevent or mitigate damage or disaster.

Disaster

A sudden, catastrophic event causing significant damage, disruption, and potentially loss of life.

Recognizing Possibilities

Identifying and understanding potential opportunities or solutions that could be beneficial in various contexts.

Ethical Dilemma

A situation where one faces a decision between two morally correct actions that conflict in some way.