Assuming the Yield Curve and the Term Structure Are Both

question 4

Multiple Choice

Assuming the yield curve and the term structure are both upward sloping at all maturities, which of the following will have the highest interest rate as measured by their yield to maturity?

• A) 20-year maturity STRIP bonds.
• B) 2-year maturity Canadian government bonds.
• C) 5-year maturity municipal bonds.
• D) 3-month maturity Canadian T-bills.
• E) Insufficient information.

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