Currently, 20-year Treasury bonds have a yield of 7 percent, while one-year Treasury bills have a yield of 5 percent. Based on this information, the yield curve is
A) upward sloping.
B) downward sloping.
C) a horizontal line.
D) None of the above.

Question

Quizplus · Accepted Answer

An upward sloping yield curve means that yields on longer-term bonds are higher than yields on shorter-term bonds. In this case, the 20-year Treasury bond has a higher yield than the one-year Treasury bill, indicating an upward sloping yield curve.

Currently, 20-Year Treasury Bonds Have a Yield of 7 Percent