Question

Which of the following would cause the yield curve to be ascending? A. An increase in demand for long term bonds from investors B. An increase in the laddering of bond portfolios by investors C. The Federal Reserve pursuing a tight monetary policy D. Short term yields declining at the same time as long term yields are increasing

Answer 1

Answer: Short term yields declining at the same time as long term yields are increasing

Explanation:

The yield curve shows yields for different maturities for identical security types.

Of the options given, what can cause the yield curve to be ascending is when the short term yields declining at the same time as long term yields are increasing.

Therefore, option D is the correct answer.