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Question 22 1 pts Short Corp just issued bonds that will mature in 10 years, and Long Corp issued bonds that will mature in 20

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Question 22 1 pts Short Corp just issued bonds that will mature in 10 years, and Long Corp issued bonds that will mature in 20 years. Both bonds promise to pay a semiannual coupon, they are not callable or convertible, and they both have the same default and liquidity risk. Assume that maturity risk premiums are the same for Treasuries and corporate bonds and that they are determined by the expression 0.1(t-1) %, where t is the years to maturity. Under these conditions, which of the following statements is CORRECT? If the yield curve for Treasury securities is flat, Short's bond must under all conditions have the same yield as Long's bonds. If the yield curve for Treasury securities is upward sloping, Short's bond must under all conditions have a higher yield than Long's bond. O If the yield curve for Treasury securities is flat, Short's bond must under all conditions have a higher yield than Long's bonds. O If the yield curve for Treasury securities is flat, Short's bond must under all conditions have a lower yield than Long's bonds. O Regardless of the shape of the Treasury yield curve, Short's bond must have a lower yield than Long's bond

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