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Which of the Following Statements Is Correct

Question 84

Multiple Choice

Which of the following statements is correct?


A) If the unbiased expectations theory is correct, we could see an inverted yield curve.
B) If a yield curve is inverted, long-term bonds have higher yields than short-term bonds.
C) If the maturity risk premium is zero, the yield curve would be flat.
D) If the unbiased expectations theory is correct, the maturity risk premium is zero.

Correct Answer:

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