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You are given the following yield curve, where all rates are nominal rates compounded semi-annually: Years to Maturity 1 2 3 4 5 7 10
You are given the following yield curve, where all rates are nominal rates compounded semi-annually: Years to Maturity 1 2 3 4 5 7 10 Yield Rate, 2 14.90% 14.75% 14.55% 14.35% 14.10% 13.00% 10.50% Which of the following statements is true about the above yield curve? O A. According to the expectations theory, interest rates are expected to rise in the near future. Thus, it would be better to have a bond portfolio with a shorter duration OB. According to the expectations theory, interest rates are expected to rise in the near future. Thus, it would be better to have a bond portfolio with a longer duration. O C. According to the expectations theory, interest rates are expected to fall in the near future. Thus, it would be better to have a bond portfolio with a shorter duration O D. According to the expectations theory, interest rates are expected to fall in the near future. Thus, it would be better to have a bond portfolio with a longer duration
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