the pure expectations theory of the term structure is correct, which of the following statements would be CORRECT?   a. If a 1-year Treasury bill has a yield to maturity of 7% and a 2-year Treasury bill has a yield to maturity of 8%, this would imply the market believes that 1-year rates will be 7.5% one year from now.     b. The yield on a 5-year corporate bond should always exceed the yield on a 3-year Treasury bond.     c. Interest rate (price) risk is higher on long-term bonds, but reinvestment rate risk is higher on short-term bonds.

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Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.