Suppose the real risk-free rate and inflation rate are expected to remain at their current levels throughout the foreseeable future. Consider all factors that affect the yield curve. Then identify which of the following shapes that the US Treasury yield curve can take.
a. Inverted yield curve
b. Downward sloping yield curve
c. Upward sloping yield curve

Respuesta :

Answer:

The correct answer is c. Upward sloping yield curve .

Explanation:

Taking into account that it is determined that both the risk-free rate and the inflation rate will have no variation, it is possible to affirm that the yield can present two movements: an upward sloping curve; or a completely flat curve.