- CFA Exams
- CFA Level I Exam
- Study Session 15. Fixed Income (2)
- Reading 46. Understanding Fixed-Income Risk and Return
- Subject 7. Interest Rate Risk and the Investment Horizon
CFA Practice Question
If a central bank is engaging in an expansionary monetary policy, it will most likely result in a(n) ______ term structure of yield volatility.
B. flat
C. upward-sloping
A. downward-sloping
B. flat
C. upward-sloping
Correct Answer: A
It will most likely cause greater volatility in the short-term bond yields than in the longer-term bonds.
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