The relationship between the rate of return and the time to maturity of similar-

Question

The relationship between the rate of return and the time to maturity of similar-risk securities is known as the term structure of interest rates. True or False?

A yield curve depicts the term structure of interest rates for similar-risk securities. True or False?

A normal curve is upward sloping because longer-term rates are higher than shorter-term rates. True or False?

According to the expectations hypothesis, if investors anticipate higher rates of inflation in the future, the yield curve will be down sloping. True or False?

Explanation / Answer

1 ) True

2)True

3)True

4)Flase

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