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The graph's yield curve is referred to as a normal yield curve. Based on the yield curve shown, which of the following statements is true?
The graph's yield curve is referred to as a normal yield curve. Based on the yield curve shown, which of the following statements is true? If inflation in the future is expected to increase, the yield curve on Government of Canada bonds is likely to be downward sloping. Interest rates on short-term maturities are higher than rates on medium- and long-term maturities. Assume a scenario in which there is no maturity risk premium (MRP = 0), the real risk-free rate is expected to remain constant, and the yield curve for Government of Canada bonds is likely to be upward sloping for the next 10 years. Is inflation expected to increase, decrease, or stay the same over the next 10 years? Stay the same Increase Decrease
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