The Yield on a 30-Year U

The yield on a 30-year U.S. Treasury security is 6.5%; the yield on a 2-year U.S. Treasury bond is 4.0%. This data indicate:

A) the yield curve is downward sloping.
B) the yield curve is flat since the risk premium needs to be added for longer maturities.
C) the yield curve is upward sloping.
D) that people expect inflation to decrease in the future.

Correct Answer:

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