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Question
A normal yield curve that is upward sloping implies that:
a. the returns on short-term securities are higher than the returns on long-term securities of similar risk.
b. the returns on long-term securities are equal to the returns on short-term securities of similar risk.
c. the returns on short-term securities are lower than the returns on long-term securities of similar risk.
d. the returns on bonds with higher maturity risks are lower than the returns on bonds with lower maturity risks.
e. the returns on bonds with a lower default risks are higher than the returns on bonds with higher default risks.
Answer
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