Question: I feel like there could be more than one correct answer here. Any help is appreciated. Thank you! Which of the following statements is correct?

I feel like there could be more than one correct answer here. Any help is appreciated. Thank you!

Which of the following statements is correct?

The probability of default is higher on short-term bonds than on long-term bonds.

Reinvestment rate risk is lower, other things held constant, on long-term than on short-term bonds.

According to the market segmentation theory, the yield curve is expected to slope downward.

Borrowers prefer to borrow on a short-term basis, as a result, the yield curve is downward sloping.

If the inflation is expected to decrease in the future, then the yield curve should have an upward slope.

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