Based on the FOMC statement of June 13, 2018 we learn that the FOMC does not take the inflation rate into account when setting the target federal funds rate. True False

QUESTION 25

The nominal yield to maturity on the five-year treasury securities is greater than the real yield to maturity on the five-year treasury security.

True

False

3.7037 points

QUESTION 26

The difference between the yield to maturity on the 30-year treasury security and the 1-year treasury security is currently over 100 basis points.

True

False

3.7037 points

QUESTION 27

Investors demand a premium on fixed income securities that will compensate them for inflation. This is why the nominal yield exceeds the real yield.

True

False