. 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.

Respuesta :

The yield on a 3-year treasury bond should always exceed the yield on a 2-year treasury bond. So , the correct answer is option C.

Government debt securities with maturities longer than 20 years are known as Treasury bonds (or T-bonds) and are issued by the U.S. Federal government. Up until maturity, when T-bonds are paid in full, the owner also receives a quarterly interest payment equal to the principle.

Treasury bonds are a subset of treasuries, a more comprehensive category of U.S. government debt that is backed by the government's ability to tax its citizens. Treasury bonds are typically thought of as virtually risk-free due to this fact.

The face value of T-bonds is paid to the owner when they reach maturity, which occurs every two years.

In addition to Treasury bills, Treasury notes, and Treasury Inflation-Protected Securities (TIPS), Treasury bonds are one of four practically risk-free government-issued securities.

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