Consider the following returns and yields: U.S. T-bill = 8%, 5-year U.S. T-note = 7%, IBM common stock = 15%, IBM AAA Corporate Bond = 12% and 10-year U.S. T-bond = 6%. Based on this information, the shape of the yield curve is

Question

Quizplus · Accepted Answer

The yield on the 10-year U.S. T-bond is lower than the yield on the 5-year U.S. T-note, indicating a downward sloping yield curve.

Consider the Following Returns and Yields: U