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Basic Question 6 of 10
Government bond risk premiums are ______.
II. probably related to the consumption-hedging benefits of government bonds
III. positively related to bond maturity, which means that the "normal" shape for the yield curve is upward-sloping
I. positive
II. probably related to the consumption-hedging benefits of government bonds
III. positively related to bond maturity, which means that the "normal" shape for the yield curve is upward-sloping
User Contributed Comments 2
| User | Comment |
|---|---|
| Logaritmus | Why I is true since there are a lot of bonds with negative Yield where inflation is positive? |
| davidt87 | could be the real return component that is negative |
I was very pleased with your notes and question bank. I especially like the mock exams because it helped to pull everything together.
Martin Rockenfeldt
Learning Outcome Statements
explain how the phase of the business cycle affects policy and short-term interest rates, the slope of the term structure of interest rates, and the relative performance of bonds of differing maturities;
describe the factors that affect yield spreads between non-inflation-adjusted and inflation-indexed bonds;
CFA® 2025 Level II Curriculum, Volume 6, Module 37.