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Given the indicated maturities listed in the following table, assume the following yields for US Treasury securities Maturity (Years) Yield (96) 1 5.5 5 5.0

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Given the indicated maturities listed in the following table, assume the following yields for US Treasury securities Maturity (Years) Yield (96) 1 5.5 5 5.0 10 4.7 20 4.4 30 3.8 On the following graph, plot the yield curve implied by these interest rates. Place a blue point (circle symbol) at each maturity and interest rate in the table, and the yield curve will draw itself, Yeld Curve INTEREST RATE (Percent) MATURITY (Years) The graph's yield curve represents Based on the yield curve shown, which of the following statements is true? Interest rates on short-term maturities are higher than rates on medium- and long-term maturities. If inflation in the future is expected to increase, the yield curve on US Treasures is likely to be downward sloping

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