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If the Treasury yield curve is downward sloping, how should the yield to maturity on a 10-year Treasury coupon bond compare to that on a

If the Treasury yield curve is downward sloping, how should the yield to maturity on a 10-year Treasury coupon bond compare to that on a 1-year T-bill?

a.

The yield on a 10-year bond would be less than that on a 1-year bill.

b.

The yields on the two securities would be equal.

c.

It is impossible to tell without knowing the coupon rates of the bonds.

d.

The yield on a 10-year bond would have to be higher than that on a 1-year bill because of the maturity risk premium.

e.

It is impossible to tell without knowing the relative risks of the two securities.

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