Which of the Following Statements Is Correct

question 109

Multiple Choice

Which of the following statements is correct?

• A) If the unbiased expectations theory is correct, we could see an inverted yield curve.
• B) If a yield curve is inverted, long-term bonds have higher yields than short-term bonds.
• C) If the maturity risk premium is zero, the yield curve would be flat.
• D) If the unbiased expectations theory is correct, the maturity risk premium is zero.

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