I have got a question on the Portfolio Management ( Reading 46) Q10 practice problem p.484
Reading 46 p.484 Q10
During a recession, the slope of the yield curve for default-free government bonds is most likely to:
C become inverted
May i know why the answer is B please ?
Because what i have understand is that an inverted yield curve is often read as being a predictor of recession, so i think the answer should be C? As i think during the recession, they would demand more yield for short term bond than long term bond?