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A bond trader observes the following information: The Treasury yield curve is downward sloping. Empirical data indicate that a positive maturity risk premium applies to

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A bond trader observes the following information: The Treasury yield curve is downward sloping. Empirical data indicate that a positive maturity risk premium applies to both Treasury and corporate bonds. Empirical data also indicate that there is no liquidity premium for Treasury securities but that a positive liquidity premium is built into corporate bond yields. On the basis of this information, which of the following statements is most CORRECT? Seleccione una: O a. A 10-year corporate bond must have a higher yield than a 5-year Treasury bond. b. A 5-year corporate bond must have a higher yield than a 10-year Treasury bond. C. Since the Treasury yield curve is downward sloping the corporate yield curve must also be downward sloping d. A 10-year Treasury bond must have a higher yield than a 10-year corporate bond. e. The corporate yield curve must be flat O

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