In: Finance
Which of the following is/are correct regarding interest rates? Pick all the correct ones.
Borrowers’ preference for long duration and lenders’ preference for short duration causes the term premium to be positive. |
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Bonds with greater default risk typically trade at lower yield-to-maturities. |
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An inverted yield curve serves as a negative indicator for the future state of the economy. |
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Zero-coupon bonds are less sensitive to interest rate changes compared to coupon bonds with the same time to maturity. |
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The yield curve is usually flat. |
Borrowers’ preference for long duration and lenders’ preference for short duration causes the term premium to be positive.
An inverted yield curve serves as a negative indicator for the future state of the economy.