The Bond Market’s Signal

c. The yield on a 3-year Treasury bond should always exceed the yield on a 2-year Treasury bond. d. If inflation is expected to increase, then the yield on a 2-year bond will exceed that on a 3-year bond. e. The real risk-free rate increases if people expect inflation to increase. Correct answer: a. 8.) One-year Treasury bills yield 6%, while 2 ... ................
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