Question: Do long-term bonds always have higher yields than short-term bonds? Why? Group of answer choices Long-term bonds always have higher yields than short-term
Do long-term bonds always have higher yields than short-term bonds? Why?\ \ Group of answer choices\ \ Long-term bonds always have higher yields than short-term bonds because long-term bonds have a higher credit risk (i.e. are more likely to default).\ \ Long-term bonds always have higher yields than short-term bonds because long-term bonds have a low credit risk (i.e. are less likely to default).\ \ Long-term bonds may sometimes have a lower yield than a short-term bond when if the market anticipates an overheating that will likely be followed by an increase in interest rates.\ \ Long-term bonds may sometimes have a lower yield than a short-term bond when the market anticipates a recession that will likely be followed by a drop in interest rates.
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