The real risk-free rate is expected to remain constant at 3% in the future, a 2% rate of inflation is expected for the next 2 years, after which inflation is expected to increase to 4%, and there is a positive maturity risk premium that increases with years to maturity. given these conditions, which of the following statements is correct? a) the yield on a 2-year t-bond must exceed that on a 5-year t-bond. b) the yield on a 5-year treasury bond must exceed that on a 2-year treasury bond. c) the yield on a 7-year treasury bond must exceed that of a 5-year corporate bond. d) the conditions in the problem cannot all be true--they are internally inconsistent. e) the treasury yield curve under the stated conditions would be humped rather than have a consistent positive or negative slope.

Self-interest achieve society’s economic goals because producers know which goods consumers want the most. as consumers and producers exercise their freedom to act in their own self-interest, markets will produce the desired goods at the lowest possible cost. consumers and producers both operate based on society’s economic goals. consumers know which goods can be produced at the lowest cost. there is a wide variety of desired goods and services in a market system because producers determine what to produce. consumers change their minds frequently. there is always a need to produce something new and improved. individual wants are diverse. what is produced is ultimately determined by consumers, because if the goods offered are not what consumers want, consumers will not buy them. producers, because they are driven by profits. producers, because they determine what to produce. consumers, because they participate in marketing surveys.

What is the purpose of the us international trade association?

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