Which of the following statements is CORRECT?
A) The yield on a 2-year corporate bond should always exceed the yield on a 2-year Treasury bond.
B) The yield on a 3-year corporate bond should always exceed the yield on a 2-year corporate bond.
C) The yield on a 3-year Treasury bond should always exceed the yield on a 2-year Treasury bond.
D) If inflation is expected to increase,then the yield on a 2-year bond should exceed that on a 3-year bond.
E) The real risk-free rate should increase if people expect inflation to increase.

Question

Quizplus · Accepted Answer

Corporate bonds typically offer higher yields than Treasury bonds due to the higher risk associated with corporate debt compared to government debt.

Which of the Following Statements Is CORRECT