Term Structure of Interest Rates

Very Easy Fixed Income Valuation Term Structure Of Interest Rates

In the context of the term structure of interest rates, which of the following statements best describes the relationship between short-term and long-term interest rates?

Short-term interest rates are typically higher than long-term interest rates.

Long-term interest rates are generally higher than short-term interest rates.

Short-term and long-term interest rates are usually the same.

Hint

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