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What factors may explain the typical smooth, upward - sloping yield curve? ( Required yield increases steadily as maturity increases. ) Group of answer choices
What factors may explain the typical smooth, upwardsloping yield curve? Required yield increases steadily as maturity increases.
Group of answer choices
Investors and lenders in different types of businesses have different investment time horizons, causing supply and demand forces to be inconsistent across yield curve maturities.
Investors and lenders must be compensated for the loss of purchasing power over the investment period inflation risk If investors expect inflation to go up in the future, yields at longer maturities must be higher than shorter maturities.
Investors and lenders prefer to be repaid sooner rather than later. Higher yields are necessary to entice investors to buy bonds with longer maturities.
All the above commonly explain the typical smooth, upwardsloping yield curve
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