Why, after a sustained period of low inflation, would the risk premium on long-term bonds be lower?

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Exploring Economics

ISBN: 9781544336329

8th Edition

Authors: Robert L. Sexton

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Question Posted: Jan 23, 2023 02:34 AM

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Why, after a sustained period of low inflation, would the risk premium on long-term bonds be lower?

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When inflation is low and stable the risk of inflation eroding the purchasing power of the bonds fixed payments is also low which means that the bond ...View the full answer

Exploring Economics

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