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?

Select one:

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

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

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

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

e$.$ The Treasury yield curve under the stated conditions would be humped rather than have a

consistent positive or negative slope.

Check