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What is the shape of the yield curve given in the following term structure? What expectations are investors likely to have about future interest rates?
What is the shape of the yield curve given in the following term structure? What expectations are investors likely to have about future interest rates? (Click on the following icon in order to copy its contents into a spreadsheet.) 1 year 10 years 20 years Term Rate (EAR, %) 2 years 2.44 3 years 2.74 5 years 3.31 7 years 3.74 2.01 4.11 4.96 What is the shape of the yield curve given the term structure? (Select the best choice below.) O A. The yield curve is a normal yield curve (increasing). B. The yield curve is an inverted yield curve (decreasing). C. It is hard to tell because we are not given an EAR for every year. D. The yield curve is a flat yield curve
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