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Question 12 Not yet answered You find that both the US and ECB treasury yield curves are backwardated. This is suggestive that: Marked out of 1.00 a. There is an trade imbalance between Europe and the USA P Flag question b. The US and European economies may be headed for recession C. The no-arbitrage equilibrium mechanism is failing d. There may be a flight of capital to safe haven investments The economy is growing steadily as one would hope f. The yields of short term instruments are higher, after controlling for risk, than the yields of long horizon instruments