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If the Yield Curve Is Normal , What Is the Interest

Question 76

Multiple Choice

If the yield curve is normal , what is the interest rate on a 20-year Treasury bond, compared to the interest rate on a 5-year Treasury bond?


A) The interest rate on the 20-year bond will be more than the interest rate on the 5-year bond.
B) The interest rate on the 5-year bond will be more than the interest rate on the 20-year bond.
C) The interest rates of the two bonds will be equal.
D) It is impossible to tell without knowing the relative risks of the bonds.

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