If the yield curve is downward sloping, which of the following statements is correct? (hint: graph the yield curves for a T- bond, a AAA bond, and a B bond)
a) The yield on the 10-year T-bond must be less than the yield on a 2-year T-bond.
b) The yield on the 5-year T-bond must exceed the yield on the 10-year AAA corporate bond.
c) The yield on the 5-year AAA corporate bond must exceed the yield on 5-year B corporate bond.
d) The yield on the 5-year AAA corporate bond must be lower the yield on the 5-year T-bond.
e) The yield on the 5-year T-bond must exceed the yield on the 5-year AAA corporate bond.