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    Exam 7: Risk Structure and Term Structure of Interest Rates
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    When the Yield Curve Is Downward-Sloping
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When the Yield Curve Is Downward-Sloping

Question 81

Question 81

Multiple Choice

When the yield curve is downward-sloping,


A) short-term yields are higher than long-term yields.
B) long-term yields are higher than short-term yields.
C) the bond market is anticipating the U.S. Treasury may default on its obligations.
D) the inflation rate is expected to rise.

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