Save Submit Test for Grading Questions Question 23 of 50 01. 22. . 23. 24. 25. 26. 27. If the pure expectations theory of the term structure is correct, which of the following statements would be CORRECT? O a. An upward-sloping yield curve would imply that interest rates are expected to be lower in the future. b. Interest rate (price) risk is higher on short-term bonds, but reinvestment rate risk is higher on long-term bonds. O c Interest rate (price) risk is higher on long-term bonds, but reinvestment rate risk is higher on short-term bonds. Od. The yield on a 5-year corporate bond should always exceed the yield on a 3-year Treasury bond. O e. If a 1-year Treasury bill has a yield to maturity of 7% and a 2-year Treasury bill has a yield to maturity of 8%, this would imply the market believes that 1-year rates will be 7.5% one year from now. 28. 29. 30. 31. 22