If one-period forward rates are decreasing with maturity, the yield curve is most likely: A . fl

Question:

If one-period forward rates are decreasing with maturity, the yield curve is most likely:

A . fl at.

B . upward-sloping.

C . downward sloping.

Th e following information relates to Questions 16–29 A one-year zero-coupon bond yields 4.0%. Th e two- and three-year zero-coupon bonds yield 5.0% and 6.0% respectively.

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