Normally, yields on short-term Treasury bonds are ________ long-term Treasury bond yields.
A) equal to the fed funds rate minus
B) equal to inflation plus
C) the same as
D) higher than
E) lower than

Question

Quizplus · Accepted Answer

Typically, short-term Treasury bond yields are lower than long-term Treasury bond yields, as investors demand a higher return for tying up their money for longer periods of time. This pattern is known as a normal yield curve.

Normally, Yields on Short-Term Treasury Bonds Are ________ Long-Term Treasury