22. Historically, the yield curve has generally been ____, which indicates that

Question

22. Historically, the yield curve has generally been ____, which indicates that long-term interest rates usually have been ____ short-term interest rates. (Points : 3)        upward sloping, lower than
       downward sloping, higher than
       upward sloping, higher than
       level, about equal to

Year

Net Cash Flow

Certainty-equivalent

1

$15 million

0.90

2

13 million

0.75

3

11 million

0.55

4

9 million

0.30

       $20,083,000
       $ 6,628,400
       $13,905,000
       $ 3,019,400

Question 23. 23. Commercial paper is: (Points : 3)        long-term with maturities greater than one year.
       short-term with maturities under six months.
       short-term with maturities that do not exceed nine months.
       long-term with maturities of greater than five years.

Explanation / Answer

22.upward sloping, higher than

yield curve has generally been upward sloping which indicates that long-term interest rates usually have been higher than short-term interest rates.

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