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The term structure of interest rates may be downward sloping if: The inflation premium decreases with maturity. There are bonds that have an unfavourable tax

The term structure of interest rates may be downward sloping if:
The inflation premium decreases with maturity.
There are bonds that have an unfavourable tax status.
The interest rate risk premium is the same for both short and long-term bonds.
Default risk premiums are higher for longer term bonds than for shorter term bonds.
The real rate of interest is lower this year than it was last year.

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