Which of the following best describes the shape of a "normal" yield curve?

a. Upward sloping

b. Downward sloping

c. Wavy with highs followed by lows

Everything else equal, long-term bonds have to pay higher returns than short-term bonds due to the:

a. maturity risk premium.

b. default risk premium.

c. risk-free rate of return.

d. inflation premium.

d. Horizontal