Which of the following statements is CORRECT?
If the maturity risk premium (MRP) equals zero, the yield curve must be flat.
The most likely explanation for an inverted yield curve is that investors expect inflation to decrease.
Because long-term bonds are riskier than short-term bonds, yields on long-term Treasury bonds will always be higher than yields on short-term T-bonds.
The yield curve can never be downward sloping.
If the maturity risk premium (MRP) is greater than zero, then the yield curve must have an upward slope.