The yield on a one-year bond is currently 3% and the expected yield for the next three years is also 3%. If the term premium is 0.5, then the yield curve
A) is upward sloping.
B) is flat.
C) is downward sloping.
D) cannot be determined.

Question

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The Answer of The yield on a one-year bond is currently 3% and the expected yield for the next three years is also 3%. If the term premium is 0.5, then the yield curve
A) is upward sloping.
B) is flat.
C) is downward sloping.
D) cannot be determined.

The Yield on a One-Year Bond Is Currently 3% and the Expected