If the Treasury yield curve ("term structure of interest rates") is downward sloping, how would the yield to maturity on

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answerhappygod
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If the Treasury yield curve ("term structure of interest rates") is downward sloping, how would the yield to maturity on

Post by answerhappygod »

If the Treasury yield curve ("term structure of interest rates")
is downward sloping, how would the yield to maturity on a 10-year
Treasury coupon bond compare to that on a 1-year
Treasury-bill?
Group of answer choices
a.) The yield on a 10-year bond would be less than that on a
1-year bill.
b.) The yield on a 10-year bond would have to be higher than
that on a 1-year bill
c.) It is impossible to tell without knowing the coupon rates of
the bonds.
d.) The yields on the two securities would be equal.
e.) It is impossible to tell without knowing the relative risks
of the two securities.
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