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Basic Question 9 of 10
An investor expects that both the 3-month and 10-year inflation rates will be 2%. Which break-even inflation rate is most likely to be higher?
B. The 10-year break-even inflation rate
C. The 3-month and 10-year break-even inflation rates should be the same.
A. The 3-month break-even inflation rate
B. The 10-year break-even inflation rate
C. The 3-month and 10-year break-even inflation rates should be the same.
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I used your notes and passed ... highly recommended!
Lauren
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.