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If you observe an upward-sloping Treasury yield curve, which of the following scenario seems to be out of place? Maturity 1 year 5 years 10

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If you observe an upward-sloping Treasury yield curve, which of the following scenario seems to be out of place? Maturity 1 year 5 years 10 years Real risk-free rate 2.5% 2.5% 2.5% 20 years 30 years 2.5% 2.5% Inflation premium 5.29 5.1% 5.0% 4.9% 4.8% Default risk premium 0.0% 0.0% 0.0% 0.0% 0.0% Maturity risk premium 0.9% 0.5% 0.3% 0.2% 0.1% Liquidity premium 0.0% 0.0% 0.00 0.0% 0.0% Select one: O a Maturity risk premium. O b. Default risk premium. O c. Inflation Premium. O d. Liquidity premium. O e Real risk-free rate. If the yield curve is upward sloping, which of the following statements is correct? (hint: graph the yield curves for a T-bond, a AAA bond, and a B bond) Select one: O a. The yield on the 10-year AAA corporate bond must be smaller than the yield on the 5-year T-bond. O b. The yield on the 5-year T-bond must be larger than the yield on the 10-year B corporate bond. The yield on the 2-year T-bond must be less than the yield on a 10-year T-bond. O d. The yield on the 5-year AAA corporate bond must exceed the yield on 5-year B corporate bond. O e. The yield on the 5-year T-bond must be larger than the yield on the 5-year AAA corporate bond

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