2

Option 5 is incorrect

Assume that the current corporate bond yield curve is downward sloping or inverted. Under this condition, we could be sure that Long-term interest rates are more volatile than short-term rates. Inflation is expected to decline in the future. Long-term bonds are a better buy than short-term bonds. The economy is not in a recession. Maturity risk premiums could help to explain the yield curve's downward slope