Question: Question 21 5.5 pts Inflation is expected to increase steadily over the next 10 years, there is a positive maturity risk premium on both Treasury

 Question 21 5.5 pts Inflation is expected to increase steadily over

Question 21 5.5 pts 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? O The yield on 7-year corporate bonds must exceed the yield on 10-year Treasury bonds. O The Treasury yield curve under the stated conditions would be humped rather than have a consistent positive or negative slope. O The yield on 10-year Treasury securities must exceed the yield on 7-year Treasury securities O The stated conditions cannot all be true they are internally inconsistent. O The yield on any corporate bond must exceed the yields on all Treasury ; bonds

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