A one-year bond offers a 12.5% yield to maturity (YTM) and a two-year bond offers an 11% yield to maturity (YTM). Based on this information which of the following is true?
Question 13 options:
a)
The term structure cannot be determined from this information.
b)
The term structure is flat.
c)
The term structure is upward sloping.
d)
The term structure is downward sloping.

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