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Homework answers / question archive / Assume the following returns and yields: U
Assume the following returns and yields: U.S. T-bill = 8%, 5-year U.S. T-note = 7%, IBM common stock = 15%, IBM AAA Corporate Bond = 12% and 10-year U.S. T-bond = 6%. Based on this information, the shape of the yield curve is ________.
Select one:
a. upward sloping
b. normal
c. flat
d. downward sloping
The correct answer is option D) Downward Sloping
| t-bill | 5 year US T-note | 10 year US T-bond |
| 8% | 7% | 6% |
