Question

Save Score: 0 of 1 pt 8 of 9 (3 complete) HW Score: 22.22 % , 2 of 9 pts P 5-38 (similar to) Question Help What is the shape of the yield curve given in the following term structure? What expectations are investors ikely to have about future interest rates? Term 2 years 10 years 20 years 1 уear 1.96 З уears 2.74 5 years 3.34 7 years Rate (EAR, %) 244 3.76 414 4 92 What is the shape of the yield curve given the term structure? (Select the best choice below) OA The yield curve is a flat yield curve. O B. It is hard to tell because we are not given an EAR for every year O C. The yield curve is an inverted yield curve (decreasing). O D. The yield curve is a normal yield curve (increasing)

Answer 1

Ans: the correct option for the answer is option D i.e. the yield curve is a normal yield curve (increasing)

Its because form the above data it is clearly seeing that by year wise Rate is increasing and if we plot the points on a graph then we come to know that curve is moving upwards and increasing