$12\mathrm{.}72\%$

$12\mathrm{.}35\%$

$1184\%$

Question $17$

$3$ pts

Inflation is expected to increase steadily over the next $10$ years, there is a positive maturity risk premium on both Treasury and corporate bonds, and the real risk$-$free rate of interest is expected to remain constant. Which of the following statements is CORRECT?

The yield on $7-$year corporate bonds must exceed the yield on $10-$year Treasury bonds.

The stated conditions cannot all be true$-$they are internally inconsistent.

The yield on any corporate bond must exceed the yields on all Treasury bonds.

The Trearury yleld curve under the stated conditions would be humped rather than have a consistent positive or negative slope.

The vield on $10-$year Treasury securities must exceed the yield on $7-$year Treasury securities$.$

uestion $18$

$3$ pts