Assume that the current corporate bond yield curve is upward sloping.Under this condition,what could we be sure of?

Question

Quizplus · Accepted Answer

An upward sloping yield curve indicates that long-term interest rates are higher than short-term rates. This could be due to many factors, including expectations of inflation, maturity risk premiums, and market supply and demand factors. Choice A is incorrect because an upward sloping yield curve does not necessarily indicate a decline in inflation. Choice B may or may not be true depending on specific market conditions. Choice D is also incorrect because volatility in interest rates is not necessarily indicated by the shape of the yield curve.

Assume That the Current Corporate Bond Yield Curve Is Upward