Purchase Solution

Slope of the yield curve

Not what you're looking for?

Ask Custom Question

Which of the following would most likely increase the slope of the yield curve?
a. An increase in the rate that prices are expected to increase over the next 30 years.
b. A decrease in the risk-free interest rate.
c. An increase in the risk-free interest rate, where the increase is the same amount for all maturity dates (e.g., a 1% increase for all maturities).
d. An increase in unemployment
e. A massive increase in short-term interest rates and no increase to long-term rates.
f. None of the above

Purchase this Solution
Purchase this Solution
Free BrainMass Quizzes
Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

View More Free Quizzes
Related BrainMass Solutions

  • Current corporate bond yield is upward sloping

    Answer: b) The economy is not in a recession As per the characteristic of the yield curve an upward sloping of yield curve assures that the economy is in boom and not in recession. The current corporate bond yield upward sloping is examined.

  • policy, interest, yield, expectation theory, fees

    If the yield on short-term securities is greater than the yield on comparable long-term securities, the yield curve will have a A) positive slope B) negative slope C) constant slope D) zero slope The supply-demand approach to explaining

  • Explaining the Term Structure of Interest Rates and its Three Facts

    Interest rates on bonds of different maturities tend to move together over time. 2. The yield curve can slope up or down.

  • Characteristics that affect security yield

    However, if the curve started in an upward slope, the slope would now be steeper as a result of the pressures on yield and price. If the curve started in a downward slope, it would now be less steeply sloped downward or more horizontal.

  • Yield curve, and inflation rate

    The yield curve however, does predict that at about 2 years, the market interest rates will rise considerably. There is steep slope in the yield curve.

  • The offer curve of a country

    If an offer curve is drawn as an upward-sloping curve, what is being assumed about the value of the country's elasticity of demand for imports and why does this assumption yield the upward-sloping curve?

  • Term structure of interest rates and its three facts.

    Treasury securities are the most common type of yield curve plot because they are the most risk-free and can be used as a benchmark for determining the yield on other types of debt.

  • Freeport Bank and Hickman Savings and Loan

    This increases interest rates and the supply demand segmentation of the market leads to the appropriate slope of the yield curve. This theory succeeds at explaining why yield curve is mostly upward sloping.

  • Taxes and imports, and the multiplier model

    State how the following information changes the slope of the AD curve. a. The effect of price level changes on autonomous expenditures is reduced. The slope of the AD curve is increased when price level changes are reduced. b.

View More Related Solutions