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in the foreseeable future, the real risk-free rate of interest,r*, is expected to remain at 3%, inflation is expected to steadily increase, and the maturity
in the foreseeable future, the real risk-free rate of interest,r*, is expected to remain at 3%, inflation is expected to steadily increase, and the maturity risk premium is expected to be 0.1 (t-1)%, where t is the number of years until the bond matures. Given this information, which of the following is correct? a) the yield on a 2 year Treasury securities must exceed the yield on a 5 year treasury security. b) the yield on a 5 year treasury securities must exceed the yield on a 10 year corporate bonds. c) the yield on a 5 year corporate bond must exceed the yield on 8 year treasury bond. d) the yield curve must be "humped" e) the yield curve must be upward sloping
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