Question: Inflation premium is expected to decrease by 0.1 percent annually in the next 30 years, while maturity risk premium is expected to increase by 0.05

Inflation premium is expected to decrease by 0.1 percent annually in the next 30 years, while maturity risk premium is expected to increase by 0.05 percent annually for each year to maturity added. What is the shape of yield curve? Upward-sloping Flat Downward-sloping Bow Question 4 (20 points) Long-term treasury bonds have 6% yield, while long-term corporate bonds have 10% yield. Default risk premium for long-term corporate bonds is 3%. What is the longterm corporate bonds liquidity premium? 3% 1% 2% 4%

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