If the yield curve is downward sloping, what is the yield to maturity on a 30-year Treasury bond relative to a 10-year Treasury bond? Multiple Choice The yield on the 10-year bond must be greater than the yield on the 30-year bond. The yield on the 10-year bond must be less than the yield on the 30-year bond. The yields on the two bonds are equal. We need to know the other risk premiums to answer this question.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Ef 217.

If the yield curve is downward sloping, what is the yield to maturity on a 30-year Treasury bond relative to a 10-year Treasury bond?
Multiple Choice The yield on the 10-year bond must be greater than the yield on the 30-year bond. The yield on the 10-year bond must
be less than the yield on the 30-year bond. The yields on the two bonds are equal. We need to know the other risk premiums to answer
this question.
Transcribed Image Text:If the yield curve is downward sloping, what is the yield to maturity on a 30-year Treasury bond relative to a 10-year Treasury bond? Multiple Choice The yield on the 10-year bond must be greater than the yield on the 30-year bond. The yield on the 10-year bond must be less than the yield on the 30-year bond. The yields on the two bonds are equal. We need to know the other risk premiums to answer this question.
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