Assume that the expectations theory holds. Select the statement that is most correct.

The yield curve for both Treasury securities and corporate securities will be flat.

The yield curve for Treasury securities is flat, but the vield curve for corporate securities is likely to be

upward sloping.

The yield curve for Treasury securities cannot be downward sloping.

If $2-$year rates yield more than $1-$year rates, investors should not purchase $1-$year bonds, and should

instead purchase $2-$year bonds.

The maturity risk premium is zero.