Assume That the Current Corporate Bond Yield Curve Is Upward

question 72

Multiple Choice

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

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

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Definitions:

Hybridization

A concept in chemistry that describes the mixing of atomic orbitals into new hybrid orbitals, suitable for the pairing of electrons to form chemical bonds.

Atom

The basic unit of a chemical element, consisting of a nucleus of protons and neutrons, with electrons orbiting this nucleus.

Molecule

The smallest unit of a chemical compound that can exist independently while retaining the composition and chemical properties of the compound.

Cis-trans Isomers

Isomers that differ in their spatial arrangement of groups around a double bond or within a ring, affecting the physical and chemical properties of the molecules.