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To analyze the current economic condition, you collect the following yields: the maximum maturity U.S. T-bill rate = 2%, 5-year U.S. T-note yield =4%, IBM
To analyze the current economic condition, you collect the following yields: the maximum maturity U.S. T-bill rate = 2%, 5-year U.S. T-note yield =4%, IBM common stock = 12%, IBM Corporate Bond (Moodys rating Aaa) = 8%, and 20-year U.S. T-bond = 5.5%. Based on the above information, the shape of the yield curve is
A. | inverted. | |
B. | flat. | |
C. | upward sloping. | |
D. | downward sloping. |
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