The Yield on a 30-Year U

question 108

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:

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

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Definitions:

Capital Contributions

The funds or assets contributed to a company by its owners or shareholders to increase equity.

Beginning Capital Balance

The total funds noted in a corporation's books at the beginning of a fiscal period.

Personal Use

The application or employment of something for the benefit or enjoyment of an individual, often distinct from business or commercial usage.

Income Distribution

The way in which a country's total GDP is spread among its population, affecting economic inequality.