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The correct yleid curve is What information does this graph tell you? -Select- d. - Select- In general, the rate of inflation is expected to

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The correct yleid curve is What information does this graph tell you? -Select- d. - Select- In general, the rate of inflation is expected to increase and the maturity risk premium is less than zero. In general, the rate of inflation is expected to decrease and the maturity risk premium is less than zero. In general, the rate of inflation is expected to increase and the maturity risk premium is greater than zero. The shape of the yleid curve depends only on expectations about future inflation, which is expected to increase. In general, the rate of inflation is expected to decrease and the maturity risk premium is greater than zero a. Select a correct yield curve based on these data. Assume that yields on U.S. Treasury securities were as follows: a. Based on this yeld curve, if you needed to bortow money for longer than 1 year, would it make sense for you to borrow short term and renew the loan or borrow long term? Explain. 1. Even though the botrower reinvests in increasing short-term rates, those rates are still below the long-term rate, but what makes the higher long: ferm rate attractive is the roliover risk that may possibly occur if the short-term rates go even higher than the long-term rate (and that could be for a long time1). 11. Cenerally, it would make sense to borrow short-term because each year the loan is renewed the interest rate would be filgher: III. Cenerally, it would make sense to borrow short-term because each vear the loan is renewed the interest rate would be lower. TV. Generady, it weuld make sonse to borrow long-term because esch year the loan is renewed the interest rate would be lower. V. Differences in yielas that may exist between the short-term and long-term cannot be explained by the forces of supply and demand in each market. The yield curve is abnormal. The yield curve is upward sloping. The yield curve is flat. The yield curve is downward sloping. The yield curve is inverted

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