1-The Yield Curve is simply the graphical relationship between bond yields and coupons. It reflects expectations about future changes in interest rates and economic conditions. In most normal market environments, the relationship is upward sloping.

True

False

2-Eva is a bond analyst and has been asked by a local reporter to explain the relationship between bonds' quality ratings and yields.

Eva tells the reporter that, all else being the same, the relationship is best described as being inverse. That is, for AAA-rated bonds the yield to maturity would be the lowest and yield to maturities would increase as the ratings quality gets lower.

Is Eva's statement to the reporter True or False?