>87654) 3- (%) 5 10 15 20 Years to Maturity 25 The correct yield curve is A b. What type of yield curve is shown? The yield curve is upward sloping c. What information does this graph tell you? In general, the rate of inflation is expected to increase and the maturity risk premium is less than zero. d. Based on this yield curve, if you needed to borrow money for longer than 1 year, would it make sense for you to borrow short term and renew the loan or borrow long term? Explain. I. Even though the borrower reinvests in increasing short-term rates, those rates are still below the long-term rate, but what makes the higher long-term rate attractive is the rollover risk that may possibly occur if the short-term rates go even higher than the long-term rate (and that could be for a long time!). II. Generally, it would make sense to borrow short-term because each year the loan is renewed the interest rate would be higher. III. Generally, it would make sense to borrow short-term because each year the loan is renewed t