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There are three factors that can affect the shape of the Treasury yield curve (r*_t, IP_t, and MRP_t) and five factors that can affect the
There are three factors that can affect the shape of the Treasury yield curve (r*_t, IP_t, and MRP_t) and five factors that can affect the shape of the corporate yield curve (r*_t, IP_t, MRP_t, DRP_t, and LP_t). The yield curve reflects the aggregation of the impacts from these factors. Suppose the real risk-free rate and inflation rate are expected to remain at their current levels throughout the foreseeable future. Consider all factors that affect the yield curve. Then identify which of the following shapes that the U.S. Treasury yield curve can take. Check all that apply. Downward-sloping yield curve Upward-sloping yield curve Inverted yield curve Identify whether each of the following statements is true or false
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