Concerning the term structure of interest rates

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Reference no: EM131316026

Which of the following statements is correct concerning the term structure of interest rates?

I. Expectations of lower inflation rates in the future tend to lower the slope of the term structure of interest rates.

II. The term structure of interest rates includes both an inflation premium and an interest rate risk premium.

III. The real rate of return has minimal, if any,

affect on the slope of the term structure of interest rates.

IV. The term structure of interest rates and the time to maturity are always directly related.

Reference no: EM131316026

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