f the pure expectations theory holds, which of the following statements is CORRECT? ...
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f the pure expectations theory holds, which of the following statements is CORRECT?
| The yield curve for both Treasury and corporate bonds would be flat. | ||
| The yield curve for Treasury securities would be flat, but the yield curve for corporate securities might be downward sloping. | ||
| The yield curve for Treasury securities cannot be downward sloping. | ||
| The maturity risk premium would be zero. | ||
| If 2-year bonds yield more than 1-year bonds, an investor with a 2-year time horizon would almost certainly end up with more money if he or she bought 2-year bonds. |
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