Which of the Following Statements Is CORRECT

question 51

Multiple Choice

Which of the following statements is CORRECT?

• A) If the maturity risk premium (MRP)is greater than zero,the Treasury bond yield curve must be upward sloping.
• B) If the maturity risk premium (MRP)equals zero,the Treasury bond yield curve must be flat.
• C) If inflation is expected to increase in the future and the maturity risk premium (MRP)is greater than zero,the Treasury bond yield curve must be upward sloping.
• D) If the expectations theory holds,the Treasury bond yield curve will never be downward sloping.
• E) Because long-term bonds are riskier than short-term bonds,yields on long-term Treasury bonds will always be higher than yields on short-term T-bonds.

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Definitions:

Fibrocartilage

A type of cartilage characterized by thick bundles of collagen fibers, found in areas requiring tough support or capable of withstanding heavy pressure, such as intervertebral discs.

Elastic Cartilage

A type of cartilage that contains elastic fiber networks and collagen fibers, providing strength and elasticity, found in the ear and epiglottis.

Loose Connective Tissue

A type of connective tissue characterized by a loosely organized matrix, which supports, binds together, and provides nutrients to surrounding tissues.

Elastic Tissue

A type of connective tissue that allows tissues in the body to resume their shape after stretching or contracting.