Yield curves offer important information about a particular segment of the bond market. When looking at a yield curve, what do you know are common variables of all debt securities represented by the curve?

(1) each bond offers the same coupon rate

(2) each bond has the same tax status (i.e., taxable or tax-exempt)

(3) each bond has the same number of years to maturity

(4) each bond has the same (very similar) quality rating

(5) each bond was issued by the same municipality or corporation

A downward sloping yield curve conveys all of the following information except for one. Which of the following is not a correct interpretation of a downward sloping yield curve?

Group of answer choices:

the market expects an expanding economic environment

inflation is expected to fall

long-term securities of a particular type yield less than short-term securities of that type

short-term rates are higher than long-term rates