Which is an advantage of bonds for a potential investor

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Problem 1: Which of the following accurately describes a normal yield curve?

Option 1: A positively sloping curve that indicates confidence in sustained economic growth in the future.
Option 2: A positively sloping curve that indicates the expectation that inflation will fall in the future.
Option 3: A negatively sloping curve that indicates the expectation that the economy will contract in the future.
Option 4: A negatively sloping curve that indicates confidence in rising inflation in the future.

Problem 2: Which of the following is an advantage of bonds for a potential investor?

Option 1: Prices remain the same regardless of whether market interest rates change.
Option 2: The interest rate on a bond can increase if a credit rating agency upgrades the bond.
Option 3: They offer predictability when it comes to long-term financial planning.
Option 4: Since there is only one type of bond, they are easy to understand.

Reference no: EM133003505

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