A one-year bond offers a 12.5% yield to maturity (YTM) and a two-year bond offers an 11% yield to maturity (YTM) .Based on this information which of the following is true?
A) The term structure is upward sloping.
B) The term structure is flat.
C) The term structure is downward sloping.
D) The term structure cannot be determined.
Correct Answer:
Verified
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