Assume That the Current Corporate Bond Yield Curve Is Upward

question 67

Multiple Choice

Assume that the current corporate bond yield curve is upward sloping.Under this condition, then we could be sure that

• A) The economy is not in a recession.
• B) Long-term bonds are a better buy than short-term bonds.
• C) Maturity risk premiums could help to explain the yield curve's upward slope.
• D) Long-term interest rates are more volatile than short-term rates.
• E) Inflation is expected to decline in the future.

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Definitions:

Symmetrical

Having similar shape and size on both sides of a dividing line, leading to a balanced and proportionate appearance.

Central Tendency

A statistical measure that identifies a single value as representative of the middle of a dataset, including the mean, median, and mode.

Variation

The occurrence of differences or changes in characteristics within a population, process, or system, often leading to diversity or discrepancies in results.

Regression Toward

A psychological defense mechanism involving a return to an earlier stage of development when faced with stress.